A company expects to sell 500 tables in April, 700 in May, and 650 in June. The

Question

A company expects to sell 500 tables in April, 700 in May, and 650 in June. The company sells these tables for $120 per unit. 30% of its sales are cash sales and 70% of its sales are credit sales. Please construct a sales budget for April, May and June.

A company’s sales budget shows the following:

                                        April              May                 June

Cash Sales                     $5,000        $7,000            $8,000

Credit Sales                $20,000       $28,000          $32,000

The company had credit sales of $10,000 in February and $15,000 in March. Please prepare a schedule of cash collections for April, May and June, assuming that 24% of credit sales are collected in the month of the sale, 34% are collected in the month after the sale, and 42% are collected 2 months after the sale.

A company expects to sell 500 tables in April, 700 in May, 650 in June, and 800 in July. The company wants its inventory of tables at the end of each month to be equal to 15% of the following month’s unit sales, and its beginning inventory for April was 75 tables. Please construct a production budget for April, May and June.

A company expects to produce 600 tables in April, 800 in May, 750 in June, 900 in July. Each table requires 30 pounds of wood, and the wood costs $16 per pound. The company wants its inventory of wood at the end of each month to be equal to 25% of the following month’s usage of wood, and its beginning inventory for April was 4,500 pounds of wood. Please construct a direct materials budget for April, May and June.

Explanation / Answer

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1. Sales Budget April May June Total Sales (units) 500 700 650 1850 Selling Price 120 120 120 120 Sales (dollars) 60000 84000 78000 222000 Cash Sale 30% 18000 25200 23400 66600 Credit Sale 70% 42000 58800 54600 155400

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