Question

Hewitt Company expects cash sales for July of S15.000, and a 22% monthly increase during August and September. Credit sales of $10,000 in July should be followed by 30% increases during August and September. What are budgeted cash sales and budgeted credit sales for September respectively?

a) $19, 500 and $12, 200
b) $22, 326 and $16, 900
c) $18, 300 and $13,000
d) $25, 350 and $14, 884

Answer 1

b) $22, 326 and $16, 900

Step-by-step explanation:

The computation is shown below:

Budgeted cash sales

July cash sales

= $15,000

August sales

= July sales + July cash sales × monthly increase

= $15,000 + $15,000 × 22%

= $15,000 + $3,300

= $18,300

September sales

= August sales + august sales × monthly increase

= $18,300 + $18,300 × 22%

= $18,300 + $4,026

= $22,326

Budgeted credit sales

July cash sales

= $10,000

August sales

= July sales + July cash sales × monthly increase

= $10,000 + $10,000 × 30%

= $10,000 + $3,000

= $13,000

September sales

= August sales + august sales × monthly increase

= $13,000 + $13,000 × 30%

= $13,000 + $3,900

= $16,900