DyanChrome estimates its sales at 12,000 units in the first quarter with an increase by 600...

DyanChrome estimates its sales at 12,000 units in the first quarter with an increase by 600 units each quarter over the year. It desires an ending inventory of finished goods equal to 20% of the next quarter’s sales. Each unit sells for $30. Forty percent of sales are on account, with the remainder being cash sales. Credit customers pay 90% during the quarter the sale was made and the balance during the following quarter.

16. How much are budgeted cash collections for the third quarter?

a. $395,280

b. $380,160

c. $356,400

d. $396,000

17. Production in units for the third quarter should be budgeted at

a. 13,080

b. 13,320

c. 15,760

d. 12,600

Solutions

Expert Solution

Cash collection	Q1	Q2	Q3
Sales units	$ 12,000	$ 12,600	$ 13,200

Cash sales	$ 216,000	$ 226,800	$ 237,600
Credit sales current month collection	$ 129,600	$ 136,080	$ 142,560
Credit sales previous month collection	0	$ 14,400.0	$ 15,120.0
Total cash collection			$ 395,280

Answer is $395,280

Production	Q1	Q2	Q3	Q4
Sales units	$ 12,000	$ 12,600	$ 13,200	$ 13,800
Add: ending inventory	$ 2,520	$ 2,640	$ 2,760
Required units	$ 14,520	$ 15,240	$ 15,960
Less: beginning inventory	0	$ 2,520	$ 2,640
Production	$ 14,520	$ 12,720	$ 13,320

Answer is 13,320

Please rate.

ekkarill92 answered 1 year ago

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