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The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): The selling price of the company's product is $19 per unit. Management expects to collect 64% of sales in the quarter in which the sales are made. 27% in the following quarter, and 9% 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 $62,200. The company expects to start the first quarter with 1.550 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1.770 units. Prepare the company's sales budget. (Omit the "$" sign in your response.) Prepare the schedule of expected cash collections. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Prepare the company's production budget for the upcoming fiscal year. (Input all amounts as positive values.)

Explanation / Answer

(a) Sales budget: 1st quarter: (12000*19) $228,000 2nd quarter: (12000*19) $228,000 3rd quarter: (15000*19) $285,000 4th quarter: (15000*19) $285,000 (b) Expected cash collections: Accounts receivable, beginning balance 1st quarter 2nd quarter 3rd quarter 4th quarter Year A/R Beginning balance 62200 0 0 0 62200 1st quarter sales 145920 61,560 0 0 207480 2nd quarter sales 0 145,920 61560 0 207480 3rd quarter sales 0 0 182400 76950 259350 4th quarter sales 0 0 0 182400 182400 208120 207480 243960 259350 918910 (c) Production Budget 1st quarter 2nd quarter 3rd quarter 4th quarter Budgeted unit sales 12000 12,000 15000 15000 Add desired ending inv 1800 2,250 2250 1770 Total units needed 13800 14250 17250 16770 Less beginning inventory 1550 1,800 2,250 2,250 Required production 12250 12450 15000 14520 (I apologize that is did not format well. Try pasting it into Word to see if you can organize the columns a little better.)

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