# Jesse Corporation Executive Summary

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Jesse Corporation Executive Summary
The marketing department of Jesse Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Units to be produced 11,000 12,000 14,000 13,000
The selling price of the company's product is \$18.00 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% in the following quarter, and 5% of sales are expected to be "'uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is \$70,200. The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending finished goods inventory
…show more content…
Q1 Sales = \$11,000
Collections in Q1 = \$11,000 x 65% = \$7,150
Collections in Q2 = \$11,000 x 30% = \$3,300
Q2 Sales = \$12,000
Collections in Q2 = \$12,000 x 65% = \$7,800
Collections in Q3 = \$12,000 x 30% =\$3,600
Q3 Sales = \$14,000
Collections in Q3 = \$14,000 x 65% = \$9,100
Collections in Q4 = \$14,000 x 30% = \$4,200
Q4 Sales
Collections in Q4 = \$13,000 x 65% = \$8,450
Schedule of Expected Cash Collections
Quarter 1 2 3 4 Year
Beginning AR \$70,200 \$70,200
Q1 Sales 7,150 \$3,300 10,450
Q2 Sales 7,800 \$3,600 11,400
Q3 Sales 9,100 \$4,200
…show more content…
Each unit requires 2 pounds of raw material that costs \$1.40 per pound. Management desires to end each quarter with an inventory of raw materials equal to 10% of the following quarter's production needs. The desired ending inventory for the fourth quarter is 1,500 pounds. Management plans to pay for 80% of raw material purchases in the quarter acquired and 20% in the following quarter. Each unit requires 0.60 direct labor-hours and direct labor-hour workers are paid \$14.00 per hour.
• Prepare the company's direct materials budget and schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year.
Quarter 1 2 3

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