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11 September, 21:03

Sirignano Corporation produces and sells one product. The budgeted selling price per unit is $84. Budgeted unit sales for October, November, December, and January are 8,400, 12,000, 13,800, and 14,300 units, respectively. All sales are on credit with 40% collected in the month of the sale and 60% in the following month. The expected cash collections for November is closest to:

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  1. 11 September, 21:24
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    Total collectible in November = $826,560

    Explanation.

    Sirignano Corporation

    October

    Sales $84 x 8,400 = 705,600

    Collections in Oct 40% = $282,240

    November

    Sales $84 x 12,000 = 1,008,000

    Collections in Nov 40% = $403,200

    60% Oct collections in Nov = $423,360

    Total collectible in Nov = $826,560

    Collections in Dec 60% = $604,800
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