Master Budget Exercises (Assignment 4)
Managerial Accounting: BUS 630
Prof: Isabel Wan
August 29, 2011
Sales and Production Budgets (8-12): The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):
| |1st Quarter |2nd Quarter |3rd Quarter |4th Quarter |
|Units to be produced |12,000 |14,000 |13,000 |11,000 |
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Percentage of sales collected in the period after the sale was 30%.
Percentage of sales that are expected to be uncontrollable is 5%.
|Schedule of Expected Cash Collections |
|Accounts receivable, beginning balance|$70,200 | | | |Accounts receivable, beginning |
| | | | | |balance $70,200 |
|2nd Quarter Sales |- |$140,400 |$64,800 |($10,800) |$205,200 |
|4th Quarter Sales |- |- |- |$163,800 |$163,800 |
2. Prepare the company's production budget for the upcoming fiscal year.
| Jessi Corporation |
|Production Budget |
|for the year Ending December 31, 2011 |
|(in units) |
|Units to be produced |1st Quarter |2nd Quarter |3rd Quarter |4th Quarter |Ending Year |
| |11,000 |12,000 |14,000 |13,000 |50,000 |
|Total Units Needed |12,800 |14,100 |15,950 |14,850 |51,850 |
|Finished Gds |11,150 |12,300 |13,850 |12,900 |
|Units to be produced |7,000 |8,000 |6,000 |5,000 |
In addition, the beginning raw materials inventory for the first quarter is budgeted to be 1,400 pounds and the beginning accounts payable for the first quarter is budgeted to be $2,940. Each unit requires 2 pounds of raw material that costs $1.40 per pound. Management desires to end each quarter with an inventory of raw materials equal to 10% of the following quarter's production needs. The desired ending inventory for the fourth quarter is 1,500 pounds. Management plans to pay for 80% of raw material purchases in the quarter acquired and 20% in the...