The budgeted cash collections during the month of March for Mapple Co. is $180,600,000.
To calculate the budgeted cash collections during the month of March for Mapple Co., we need to consider the credit sales and collection percentages. Here are the steps:
- Calculate the total credit sales for March by multiplying the March sales units by the selling price: 258,000 units x $700 = $180,600,000.
- Determine the collection percentages for each month:
- Month of Sale: 15% ($180,600,000 x 0.15 = $27,090,000)
- First Month After Sale: 60% ($180,600,000 x 0.60 = $108,360,000)
- Second Month After Sale: 25% ($180,600,000 x 0.25 = $45,150,000)
- Sum up the collections for March:
- Month of Sale: $27,090,000
- First Month After Sale: $108,360,000
- Second Month After Sale: $45,150,000
Therefore, the budgeted cash collections during the month of March is $27,090,000 + $108,360,000 + $45,150,000 = $180,600,000.
Complete Question :
Mapple Co. manufactures smart phones. The following unit sales are budgeted for the first six months of 2022:
January February March April May June
Sales (in units) 250000 255000 258000 260000 262000 265000
The selling price of the product is $700. All sales are on credit, and of the credit sales, 15% are collected in the month of sale, 60% are collected during the first month after the sale, and the remaining 25% are collected during the second month after the sale. Company policy calls for the ending finished goods inventory of a month to equal 40% of the next month's budgeted unit sales. Budgeted cash collections during the month of March is: