Unos has budgeted sales for the next five months as follows: Budgeted Sales in U

Question

Unos has budgeted sales for the next five months as follows: Budgeted Sales in Units January 6,200 units February 4,800 units March 9,100 units April 7,500 units May 5,300 units Unos product sells for $18 per unit. Experience has shown that 10% of the company's sales are cash sales and 90% of the company's sales are made on account. On average, 30% of the sales on account are collected in the month of sale, 35% are collected in the month following sale, 20% are collected in the second month following sale, and the remaining 15% is collected three months after the month of sale. Calculate the total expected cash collections for the month of April.

Explanation / Answer

Calculate the total expected cash collections for the month of April.

April Cash sales (7500*18*10%) 13500 Collection from customer January credit Sales (6200*18*90%*15%) 15066 February Credit Sales (4800*18*90%*20%) 15552 March credit sales (9100*18*90%*35%) 51597 April Credit Sales (7500*18*90%*30%) 36450 Total cash collection in april 132165

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