Grafton sells a product for $700. Unit sales for May were 400 and a 3% growth in unit sales is forecasted for each month. Grafton pays a sales manager a monthly salary of $3,000 and a commission of 2% of sales in dollars. Assume 30% of Grafton's sales are for cash. The remaining 70% are credit sales; these customers pay in the month following the sale. Compute the budgeted cash receipts for June.

Question

Quizplus · Accepted Answer

The budgeted cash receipts for June include 30% of June's sales and 70% of May's sales. June's sales are 412 units (400 units * 1.03 growth) at $700 each, totaling $288,400. 30% of this is $86,520. May's sales were 400 units at $700 each, totaling $280,000. 70% of this is $196,000. Adding these gives $282,520.

Grafton Sells a Product for $700