Shadee Corp. expects to sell 550 sun visors in May and 310 in June. Each visor sells for $16. Shadee’s beginning and ending finished goods inventories for May are 65 and 45 units, respectively. Ending finished goods inventory for June will be 65 units. It expects the following unit sales for the third quarter: July 530 August 450 September 450 Sixty percent of Shadee’s sales are cash. Of the credit sales, 52 percent is collected in the month of the sale, 38 percent is collected during the following month, and 10 percent is never collected. Required: Calculate Shadee’s total cash receipts for August and September.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Shadee Corp. expects to sell 550 sun visors in May and 310 in June. Each visor sells for $16. Shadee’s beginning and ending finished goods inventories for May are 65 and 45 units, respectively. Ending finished goods inventory for June will be 65 units.
It expects the following unit sales for the third quarter:
| July | 530 |
| August | 450 |
| September | 450 |
Sixty percent of Shadee’s sales are cash. Of the credit sales, 52 percent is collected in the month of the sale, 38 percent is collected during the following month, and 10 percent is never collected.
Required:
Calculate Shadee’s total cash receipts for August and September.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
