Exercise 7-2 Preparing Sales and Production Budgets (LO2 - CC5, 6) The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year: Budgeted sales (units) 1st Quarter 8,100 2nd Quarter 10,100 3rd Quarter 12,100 4th Quarter 11,100 The selling price of the company's product is $21 per unit. Management expects to collect 55% of sales in the quarter in which the sales are made and 40% in the following quarter; 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which are expected to be collected in the first quarter, is $81,500. The company expects to start the first quarter with 2,050 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 2,300 units. Required: 1-a.Prepare the company's sales budget. JESSI CORPORATION Sales Budget 2nd Quarter 3rd Quarter $ 10,100 $ 12,100 1st Quarter $ 8,100 4th Quarter $ 11,100 Year 41,400 Total sales $ 1-b.Prepare the schedule of expected cash collections. 4th Quarter 0 Year 81,500 $ JESSI CORPORATION Schedule of Expected Cash Collections 1st Quarter 2nd Quarter3rd Quarter Accounts receivable, beginning balance | $ 81,500 $ 0 1st Quarter sales 93,555 37,422 2nd Quarter sales 116,655 3rd Quarter sales 4th Quarter sales Total cash collections $ 175,055 $ 154,077 $ 0 $ 0 $ 81,500 2. Prepare the company's production budget for the upcoming fiscal year. JESSI CORPORATION Production Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Total units needed