Question

Rovniak Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $890,000 in October, $950,000 in November, $1,025,000 in December, and $920,000 in January. Rovniak’s sales are 25% cash and 75% credit. Rovniak’s collection history indicates that credit sales are collected as follows:
25% in the month of the sale
65% in the month after the sale
8% two months after the sale
2% are never collected
Requirements
1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales.
2. Prepare a cash collections budget for December and January. Round all answers up to the nearest dollar.


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  • CreatedApril 30, 2015
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