1) Company ABC budgeted sales for March as 22,000 units, April as 25,000 units, and May as 28,000 units. The selling price per unit is $10. Company ABC only sells on credit and collects 75% in the month of sale, with 25% collected in the month following the sale. The February 28th accounts receivable balance was $32,000. What is the amount of cash collections expected in March?
a. $173,000 b. $165,000 c. $228,000 d. $197,000
2) Company Zeta budgeted sales for March as 21,000 units, April as 23,000 units, and May as 24,000 units. The selling price per unit is $11. Company Zeta only sells on credit and collects 80% in the month of sale, with 20% collected in the month following the sale. The February 28th accounts receivable balance was $18,000. What is the amount of sales expected in April?
a. $248,600
b. $202,400
c. $231,000
d. $253,000
Company ABC budgeted sales for March as 22,000 units, April as 25,000 units, May as 28,000 units, and June as 22,000 units. On February 28th, the company had 8,000 units on hand. Desired ending inventory is equal to 18% of the following month’s budgeted sales in units. What is the required production for the month of March in units?
a. 14,000
b. 18,500
c. 25,960
d. 20,960
*Please explain each step and what formulas you used*