The marketing department of Jessi Corporation has submitted thefollowing sales forecast for the upcoming fiscal year (all salesare on account):
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter |
| Budgeted unit sales | 11,700 | 12,700 | 14,700 | 13,700 |
|
The selling price of the company’s product is $16 per unit.Management expects to collect 75% of sales in the quarter in whichthe sales are made, 20% in the following quarter, and 5% of salesare expected to be uncollectible. The beginning balance of accountsreceivable, all of which is expected to be collected in the firstquarter, is $71,600.
The company expects to start the first quarter with 1,755 unitsin finished goods inventory. Management desires an ending finishedgoods inventory in each quarter equal to 15% of the next quarter’sbudgeted sales. The desired ending finished goods inventory for thefourth quarter is 1,955 units.
Required:
1. a.Calculate the estimated sales for each quarter of thefiscal year and for the year as a whole.
b. Calculate the expected cash collections for each quarter ofthe fiscal year and for the year as a whole.
c. Calculate the required production in units of finished goodsfor each quarter of the fiscal year and for the year as awhole.
