The marketing department of Graber Corporation has submitted the following sales forecast for the upcoming fiscal year.
- 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
- Budgeted unit sales 19,000 18,000 17,000 18,000
The selling price of the company%u2019s product is $23.00 per unit. Management expects to collect 75% of sales in the quarter in which the sales are made, 20% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $63,000.
The company expects to start the first quarter with 2,850 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter%u2019s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 3,050 units.