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ABC Company’s budgeted sales for June, July, and August are 13,200, 17,200, and 15,200 units respectively. The selling price for each unit is $15. Based on past experience, ABC expects that 40% of a month’s sales will be collected in the month of sale, 55% in the following month, and 3% in the second month following the sale. Required: Prepare an analysis of cash receipts from sales for ABC Company for August.

ABC Company’s budgeted sales for June, July, and August are 13,200, 17,200, and 15,200 units respectively. The selling price for each unit is $15. Based on past experience, ABC expects that 40% of a month’s sales will be collected in the month of sale, 55% in the following month, and 3% in the second month following the sale. Required: Prepare an analysis of cash receipts from sales for ABC Company for August.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...
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ABC Company’s budgeted sales for June, July, and August are 13,200, 17,200, and 15,200 units respectively. The selling price for each unit is $15. Based on past experience, ABC expects that 40% of a month’s sales will be collected in the month of sale, 55% in the following month, and 3% in the second month following the sale.

Required:

Prepare an analysis of cash receipts from sales for ABC Company for August.

 

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