Master Budget Exercise

Master Budget Exercise

Joe Chatman

BUS630: Managerial Accounting

Prof. Isabel Wan

9 Jul 12

Master Budget Exercise

For this week’s assignment, we are tasked with completing budget schedules for the marketing department of the Jessi Corporation, production departments of the Hareston Company, and Raredon Corporation. Having limited exposure to accounting practices, this writer submits that the results are subject to criticism and have much room for improvement.

The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):

| |1st Quarter |2nd Quarter |3rd Quarter |4th Quarter |

|Units to be produced |11,000 |12,000 |14,000 |13,000 |

The selling price of the company's product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% 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 $70,200. The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,850 units.

Prepare the company's sales budget and schedule of expected cash collections.

| | | | | | |

|Jessi Corporation |

|Sales Budget...