Posted: July 21st, 2021

Jessi corporation estimated collections and required production

The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):

budgeted unit sales

1st Quarter 11700

2nd Quarter 12700

3rd Quarter 14700

4th Quarter 13700

The selling price of the company’s product is $16 per unit. Management expects to collect 75% of sales in the quarter in which the sales are made, 20% in the following quarter, and 5% 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 $71,600.

The company expects to start the first quarter with 1,755 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 1,955 units.

Required:

1 Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole.

quarter 1-4 and year?

2 Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole

quarter 1-4 and year?

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