Cash receipts analysis
Response to the following :
In addition to the information presented in problem, the selling price for each unit is $18. Based on past experience, ABC expects that 30% of a month's sales will be collected in the month of sale, 60% in the following month, and 8% in the second month following the sale.
Required: Prepare an analysis of cash receipts from sales for ABC Company for August.
Problem:
Production budget
ABC Company's budgeted sales for June, July, and August are 12,000, 16,000, and 14,000 units, respectively. ABC requires 30% of the next month's budgeted unit sales as finished goods inventory each month. Budgeted ending finished goods inventory for May is 3,600 units.
Required: Calculate the number of units to be produced in June and July.