Answer:
Instructions are below.
Explanation:
Giving the following information:
Accounts receivable= $296,000
Sales on January= $860,000
First, we need to determine the cash collection for January:
Sales on account from previous months= 296,000
Sales on account January= (860,000*0.8)*0.75= 516,000
Sales in cash January= 860,000*0.2= 172,000
Total cash collection= $984,000
Beginning inventory= $8,000
Ending inventory= $9,400
Cost of goods sold= $10,260
To calculate the budgeted production, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
Production= 10,260 + 9,400 - 8,000= $11,660
