Reference no: EM133154367
Question - The marketing department of XYZ Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):
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Activity Cost Pool (Activity Measure)
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1st Quarter
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2nd Quarter
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3rd Quarter
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4th Quarter
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Budgeted unit sales
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9000
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10000
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11000
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12000
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The selling price of the company's product is $19.00 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 $65,800.
The company expects to start the first quarter with 1,350 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 1,900 units.
Required -
1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole (prepare a Sales Budget).
2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole (prepare a Schedule of Expected Cash Collections).
3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole (prepare a Production Budget).