Question

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 1st Quarter 11, 900 2nd Quarter 3rd Quarter 4th Quarter 12,900 14,900 13,900 The selling price of the company's product is $18 per unit Management expects to collect 75% of sales in the quarter in 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 1,785 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 inventory 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 whole. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Total sales

Answer 1

1)

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Total
Budgeted unit sales	11900	12900	14900	13900	53600
Selling price per unit	$18	$18	$18	$18	$18
Total sales	$214200	$232200	$268200	$250200	$964800

2)

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Beginning accounts receivable	$72000				$72000
1st Quarter	(214200*75%)= 160650	(214200*20%)= 42840			203490
2nd Quarter		(232200*75%)= 174150	(232200*20%)= 46440		220590
3rd Quarter			(268200*75%)= 201150	(268200*20%)= 53640	254790
4th Quarter				(250200*75%)= 187650	187650
Total cash collections	$232650	$216990	$247590	$241290	$938520

3)

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Budgeted unit sales	11900	12900	14900	13900	53600
Add: Desired ending inventory	(12900*15%)= 1935	(14900*15%)= 2235	(13900*15%)= 2085	1985	1985
Total units needed	13835	15135	16985	15885	55585
Less: Beginning inventory	(1785)	(1935)	(2235)	(2085)	(1785)
Required production in units	12050	13200	14750	13800	53800

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