The marketing department of Jessi Corporation has submitted

The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account) Budgeted unit sales 11,960 14,968 13,908 The selling price of the company\'s product S18 per unit Management expects to collect 75% of sales in the quarter n which the sales are made. 20% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $72,000. The company expects to start the first quarter with 1785 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter\'s budgeted sales. The desired ending finished goods mentory for the fourth quarter is 1,985 units Required: 1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole 2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole 3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 3 Calculate the estimated sales for each quarter of the fiscal year and for the year as a Quarter Total sales Required 2 >

Solution

Jessi Corporation

1. Estimated sales for each quarter and for the year:

                 

2. Expected cash collections for each quarter and year as a whole:

                                             |1st quarter| 2nd quarter| 3rd quarter| 4th quarter| Year

Note: 1st quarter sales are calculated as 214200 as per previous schedule. Of this , cash collections are 75% i.e 160650 in the first quarter and 20% i.e. 42840 in the 2nd quarter. All the cash collections are calculate as per these percentages for the following quarters

3. Production in units of finished goods per quarter and year as whole:

Note: 15% of the sales of the next quarter becomes the ending inventory of the previous quarter

i.e. 12900 x 15%=1935 is ending inventory of quarter 1 and beginning inventory of quarter 2, and so on.

The beginning inventory of quarter 1 is given to us as 1785 units and the ending inventory of quarter 4 is given as 1985 units

	1st quarter	2nd quarter	3rd quarter	4th quarter	total
budgeted unit sales	11900	12900	14900	13900	53600
Selling price	$18	$18	$18	$18	$18
total sales	214200	232200	268200	250200	964800