Business, 17.08.2019 21:20, vlactawhalm29

Bear, inc. estimates its sales at 200,000 units in the first quarter and that sales will increase by 20,000 units each quarter over the year. they have, and desire, a 25% ending inventory of finished goods. each unit sells for $35. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. the remainder is received in the quarter following sale. cash collections for the third quarter are budgeted at

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answered: aliami0306oyaj0n

The Cash collections for the third quarter are budgeted at $8,274,000

Explanation:

For computing the cash collections, following steps is required which is described below:

1. Compute the second and third-year sales units:

Since in the question, it is said that the sales units are increased by 20,000 for each quarter.

So,

Second quarter sales units = First Quarter sales units + increase units

= 200,000 + 20,000

= 220,000

And, the third quarter sales units = Second quarter sales units + increased units

= 220,000 + 20,000

= 240,000

2. Calculate the sales value of second and third quarter:

Second quarter sales value = Sales units of second quarter × selling price per unit

= 220,000 × $35

= $7,700,000

And, the third quarter sales value = Sales units of third quarter × selling price per unit

= 240,000 × $35

= $8,400,000

3. Compute the cash sales and credit sales as per the given proportion which is mentioned in the question :

For third quarter:

Cash sales = 40% of third quarter sales revenue

= 40% × $8,400,000

= $3,360,000

Since 40% is the cash sales, so 60% is the credit sales

Therefore, the credit sales based on third quarter sales revenue

= 60% × 70% × third quarter sales revenue

= 60% × 70% × $8,400,000

= $3,528,000

And, the credit sales based on second quarter sales revenue

= 60% × 70% × second quarter sales revenue

= 60% × 30% × $7,700,000

= $1,386,000

So, the total cash collection would be equal to

= Cash collection of third quarter + credit sales based on second quarter sales revenue + credit sales based on third quarter sales revenue

= $3,360,000 + $1,386,000 + $3,528,000

= $8,274,000

Hence, the Cash collections for the third quarter are budgeted at $8,274,000

answered: Guest

answer; the coefficient of determination;

answered: Guest

yes the correct answer was

b.the increased supply will create a surplus.

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Bear, inc. estimates its sales at 200,000 units in the first quarter and that sales will increase by...