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hello,Sir,I have two questions need to be solved,
Q1:All sales are on credit and 50% of cash is received in the month following the sale and the remainder two months after the sale
I’m confused by this sentence,how exactly the cash is received?
Q2:a component M which uses 3kgs of raw material X,budgeted sales of M are 48000 units,the budgeted production of M is 53000 units.
closing inventory of raw material X:one month’s worth of production
What confused me most is the amount of closing inventory of raw material X.
I would be very appropriate for your answer,thank u very much^_^
Q1: It means that if you sold goods in January for $100, then $50 would be received in February (the month following sale) and the other $50 would be received in March (two months after sale).
Q2: If the production was 53,000 units per month, then since each unit uses 3 kg, the inventory would be 53,000 x 3 kg.
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