Question

Big Watches Co. makes one product and it provided the following information to help prepare the master budget for its first four months of operations:

- The budgeted selling price per unit is $86. Budgeted unit sales for September, October, November, and December are 17,000,17,000,17,000, and 17,000 units, respectively. All sales are on credit.
- 35% of credit sales are collected in the month of the sale and 65% in the following month.
- The ending finished goods inventory equals 21% of the following month's unit sales.
- The ending raw materials inventory equals 22% of the following month's raw materials production needs. Each unit of finished goods requires 11 pounds of raw materials. The raw materials cost $13.00 per pound.
- 25% of raw materials purchases are paid for in the month of purchase and 75% in the following month.
What are the budgeted sales for November?
Round your answer to the nearest whole number.

Answer 1

The budgeted sales for November are approximately 28,050 units.

Step-by-step explanation:

The budgeted sales for November can be calculated by considering the budgeted unit sales and the percentage of credit sales collected in each month. In this case, the budgeted unit sales for each month are the same and equal to 17,000 units. Additionally, 35% of credit sales are collected in the month of the sale and 65% in the following month.

To calculate the budgeted sales for November, we can use the following formula:

Budgeted Sales = Budgeted Unit Sales for November + 65% of Credit Sales from October

Plugging in the values, we get:

Budgeted Sales = 17,000 + 0.65 * 17,000 = 17,000 + 11,050 = 28,050

Rounding to the nearest whole number, the budgeted sales for November are approximately 28,050 units.