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TATA, Inc. estimates its sales at 200,000 units in the first quarter and that sales will increase...

Question:

TATA, 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?

Sales Budget:

Sales budget is a budget which shows the company's expected sales for a period. This is based on estimate and is usually on a per month or per quarter basis. This is presented in sales units and sales dollars.

Answer and Explanation:

Q1 Q2 Q3 Q4
Sales 200,000 220,000 240,000 260,000


Cash collections from
Quarter 2 on account (220,000 * 60% * 30%) 39,600
Quarter 3 ...

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Sales Budget: Definition & Examples

from Accounting 301: Applied Managerial Accounting

Chapter 11 / Lesson 4
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