Question

Ahmed Inc. has developed the following sales forecast for the second third of the year: Month...

Ahmed Inc. has developed the following sales forecast for the second third of the year: Month Sales May $500,000 June $650,000 July $380,000 August $300,000 Collection pattern: 40 percent in the month of sale 60 percent in the month after sale Accounts receivable as of April 30 $80,000 Actual Finished goods inventory as of April 30 90,000 The company's selling price is $20 per unit and they want an ending inventory equal to 20 percent of the next month's sales. Reference: Ref. 15-3

How much is expected to be collected from sales in June?

A. $560,000 B. $300,000 C. $590,000 D. $260,000

What is the budgeted beginning balance in units for finished goods inventory on July 1?

A. 6,500 B. 5,000 C. 3,000 D. 3,800

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