Franklin Corp Historically,the Cash Collection of Sales Has Been as Follows: 60

question 34

Essay

Franklin Corp.sells glass vases to various florists throughout the country.Each vase sells for $.50.The following sales forecast (in units)has been prepared for the first six months of 2009:
$$\begin{array} { l l } \text { January } & 3000 \\\text { February } & 6000 \\\text { March } & 5000 \\\text { April } & 3000 \\\text { May } & 5000 \\\text { June } & 2000\end{array}$$
Historically,the cash collection of sales has been as follows: 60 per cent in the month of sale,35 per cent in the month following sale,and 4 per cent in the second month following sale.The remaining 1 per cent is uncollectible.
Required: Prepare a cash receipts budget for the second quarter of 2009 (April through June).

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Definitions:

Operating Cost

Expenses associated with the day-to-day operations of a business, excluding costs related to direct material and direct labor.

Useful Life

The estimated period that an asset is expected to be usable for the purpose it was acquired.

Differentiation Value

The perceived value added to a product or service through unique features and qualities that set it apart from competitors.

Value-based Pricing

A pricing strategy where the price of a product or service is based on the perceived value to the customer rather than the cost of production.