Reference no: EM1310990

Calculation of budgeted production units and budgeted cash receipts at given sales level.

1. If the expected sales volume for the current period is 7,000 units, the desired ending inventory is 200 units, and the beginning inventory is 300 units, the number of units set forth in the production budget, representing total production for the current period, is ________.

a) 7,000

b) 6,900

c) 7,100

d) 7,200

2. The Martin Company had a finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months were: January - 200,000 units; February - 180,000 units; March - 210,000 units; and April - 230,000 units. The Martin Company wishes to maintain a desired ending finished goods inventory of 20% of the following months sales.
What should the budgeted production be for January?

a) 236,000

b) 181,000

c) 200,000

d) 219,000

3. Dandy Jeans sells two lines of jeans; Simple Life and Fancy Life. Simple Life sells for $85.00 a pair and Fancy Life sells for $100.00 a pair. The company sells all of its jeans on credit and estimates that 60% is collected in the month of the sale, 35% is collected in the following month, and the rest is considered to be uncollectible. The estimated sales for Simple are as follows: January 20,000 jeans, February 27,500 jeans, and March 25,000 jeans. The estimated sales for Fancy are as follows: January 18,000 jeans, February 19,000, and March 20,500 jeans. What are the expected cash receipts for the month of March?

a) $3,988,125

b) $2,505,000

c) $2,125,000

d) $4,175,000