Hesterman Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Credit sales are collected:
40% in the month of the sale
60% in the following month
The ending finished goods inventory should equal 40% of the following month's sales. The ending raw materials inventory should equal 20% of the following month's raw materials production needs.
The expected cash collections for May is closest to:

Question

Hesterman Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations:   Credit sales are collected:
40% in the month of the sale
60% in the following month
The ending finished goods inventory should equal 40% of the following month's sales. The ending raw materials inventory should equal 20% of the following month's raw materials production needs.
The expected cash collections for May is closest to:

Quizplus · Accepted Answer

The expected cash collections for May are computed as follows:
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Hesterman Corporation Makes One Product and Has Provided the Following