Budgets: 7 points.
Blue Company Inc. manufactures two models of product, A and B. The following data applies to Blue's
sales and production data for the month of February.
Product A Product B
Estimated inventory in units, February 1
4,500
2,250
Desired inventory, February 28
4,000
2,500
Expected sales in units
75,000
5,000
Unit sales price
$75
$120
Calculate the sales (dollars) and production (units) budgets for each product.
Sales
Product A
Product B
Production
The following data was reported by Brown Company Inc.
Cash sales
Credit sales
Total sales
Sept.
Oct.
Nov. (est.)Dec. (est.)
$7,000
$6,000
$8,000 $6,000
50,000
48,000 62,000 80,000
$57,000
$54,000 $70,000 $86,000
Past experience indicates that net collections normally occur, as follows:
no amounts are collected during the month of sale.
80% of sales in any month are collected the following month.
19% of sales in any month are collected in the second following month.
1% of sales are uncollectible.
Given Brown's experience, calculate the following:
Total cash receipts for November
Total cash receipts for December
What is the Accounts Receivable
balance on Nov. 30 if the Oct. 31
balance is $50,000?
