Question

1) Budgeted sales (in units) for the Rockwall Energy Drink Company are as follows:

September		45,000 units
October		60,000 units
November		40,000 units
December		75,000 units

The company wishes to have 10% of the next month’s sales on hand at the end of each month. How much is budgeted production for November?

A) 43,500 units

B) 40,000 units

C) 47,500 units

D) 36,000 units

2) SalaRita’s sales are 32% cash and 68% credit. Of the credit sales, 40% of credit sales are collected in the month of sale, 45% in the month following the sale, and 15% is collected two months after. Budgeted sales data is as follows:

June		$200,000
July		120,000
August		150,000

How much is total cash collected during August?

A) $145,920

B) $105,120

C) $88,800

D) $144,000

Answer 1

1) budgeted production for November

= 90 % * Sales in November+ 10% * Sales in December

= 90 % *  40,000 units + 10% * 75,000 Units

= 43,500 Units

Hence the correct answer is :A) 43,500 units

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2)

The correct answer is A) $145,920

Note:

	June	July	August
Sales	2,00,000	1,20,000	1,50,000
Cash Sales ( 32%)	64,000	38,400	48,000
Credit Sales ( 68%)	1,36,000	81,600	1,02,000
Credit Collection :
40% in month of Sales	54,400	32,640	40,800
45% in following Month		61,200	36,720
15% two months after Sale			20,400
Cash Collection ( Credit Collection + Cash Collection)	1,18,400	1,32,240	1,45,920