Problem:
Fruity Juice Company plans to sell 800,000 bottles of its best-selling fruit juice blend during the first quarter of 2005 at a price of $12 per bottle. Budgeted sales for the first four months of 2005 are:
January ........................................ 200,000 bottles
February ...................................... 250,000 bottles
March .......................................... 350,000 bottles
April ................................. ...........400,000 bottles
Fruity Juice has the following collection policy:
Cash Collections
Current Month 20%
One Month After Sale 50%
Two Months After Sale 25%
5% is written off at the end of the second month
Prepare the sales and cash collections budgets for Fruity Juice for April only using the space provided on the answer sheet. You MUST show complete supporting computations to earn credit for your answer.