Question 3 Shown below are budgeted sales for Betty DeRose, Inc.: Budgeted Sales

Question

Question 3

Shown below are budgeted sales for Betty DeRose, Inc.:

                  Budgeted Sales in Units

January                8,100 units                                

February               6,300 units

March 4,100 units

April 6,900 units

May                    ????? units

The selling price is $15 per unit. 20% of the company's sales are cash sales
and 80% of the company's sales are made on account. The sales on account are
collected in the pattern 30% in the month of sale, 35% in the month following
sale, 20% in the second month following sale, and the final 15% is collected
in the third month following sale.

Assume Betty's pro forma balance sheet at May 31 reported a budgeted accounts
receivable balance of $122,376.

Calculate the number of units budgeted to be sold in May. Do not use decimals,
the $, or type the word units after your answer.

Explanation / Answer

Accounts receivable from March sales 7380 =4100*15*80%*15% Accounts receivable from April sales 28980 =6900*15*80%*35% Accounts receivable from May sales 86016 =122376-7380-28980 Total credit sales = 86016/70%= 122880 Total sales = 122880/80%= 153600 Number of units budgeted to be sold in May =153600/15= 10240

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.