BUS 630 Week 4 Assignment Master Budget Exercise
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Complete the following three exercises and submit to your instructor. Be sure to show your work for calculations to earn full credit.
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
11,000
12,000
14,000
13,000
The selling price of the company's product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% 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 $70,200. The company expects to start the first quarter with 1,650 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 1,850 units.
· Prepare the company's sales budget and schedule of expected cash collections.
· Prepare the company's production budget for the upcoming fiscal year.
Direct Materials and Direct Labor Budgets (8-13): The production department of Hareston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
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....