THE LINES REPRESENT EMPTY BOXES FOR TOTALS AND THE MAY POST OUT OF LINE but shou
ID: 2375595 • Letter: T
Question
THE LINES REPRESENT EMPTY BOXES FOR TOTALS AND THE MAY POST OUT OF LINE but shouldnt.
Rolen, Inc., is in the process of preparing the fourth quarter budget for 2010, and the following data have been assembled:
The company sells a single product at a price of $58 per unit. The estimated sales volume for the next six months is as follows:
All sales are on account. The company's collection experience has been that 30% of a month's sales are collected in the month of sale, 68% are collected in the month following the sale, and 2% are uncollectible. It is expected that the net realizable value of accounts receivable (i.e., accounts receivable less allowance for uncollectible accounts) will be $461,448 on September 30, 2010.
Management's policy is to maintain ending finished goods inventory each month at a level equal to 30% of the next month's budgeted sales. The finished goods inventory on September 30, 2010, is expected to be 3,240 units.
To make one unit of finished product, 4 pounds of materials are required. Management's policy is to have enough materials on hand at the end of each month to equal 40% of the next month's estimated usage. The raw materials inventory is expected to be 18,144 pounds on September 30, 2010.
The cost per pound of raw material is $3, and 70% of all purchases are paid for in the month of purchase; the remainder is paid in the following month. The accounts payable for raw material purchases is expected to be $41,018 on September 30, 2010.
Prepare a sales budget in units and dollars, by month and in total, for the fourth quarter (October, November, and December) of 2010. (Omit the "$" sign in your response.)
OCOTOBER NOVEMBER DECEMBER TOTAL
EXPECTED SALES UNIT ______ ________ _________ $ ______
Selling price per unit $ ______ $ ______ $______ $ ______
TOTAL SALES $_______ $ ______ $ _______ $ ________
(b)
Prepare a schedule of cash collections from sales, by month and in total, for the fourth quarter of 2010.(Omit the "$" sign in your response.)
CASH COLLECTIONS from: OCOTOBER NOVEMBER DECEMBER TOTAL
September sales $ ______ $______
October sales ________ $ ______ _______
December sales _______ _____
TOTAL cash collections $______ $________ $_______ $________
The company sells a single product at a price of $58 per unit. The estimated sales volume for the next six months is as follows:
Explanation / Answer
Prepare a sales budget in units and dollars, by month and in total, for the fourth quarter (October, November, and December) of 2010. (Omit the "$" sign in your response.) October November December Total Expected Sales Unit 10800 12600 18000 41400 Selling Price Per unit $ 58.00 $ 58.00 $ 58.00 $ 58.00 Total Sales $ 626,400.00 $ 730,800.00 $ 1,044,000.00 $ 2,401,200.00 (b) Prepare a schedule of cash collections from sales, by month and in total, for the fourth quarter of 2010.(Omit the "$" sign in your response.) Cash Collection from: October November December Total September Sale $ 461,448.00 $ 461,448.00 October Sale $ 187,920.00 $ 425,952.00 $ 613,872.00 November Sale $ 219,240.00 $ 496,944.00 $ 716,184.00 December Sale $ 313,200.00 $ 313,200.00 Total Cash Collection $ 649,368.00 $ 645,192.00 $ 810,144.00 $ 2,104,704.00
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