Diego, Inc., sells two products, Baubles and Charms. The sales forecast in units for the first quarter of the coming year is:?BaublesCharmsJanuary…..20,00036,000February…28,00060,000March……36,00064,000Cash sales are 30% of each product's monthly sales. The remaining sales are credit sales which are collected as follows: 70% in the month of sale, 20% the next month, and 10% in the following month. Unit sale prices are $30 and $20 for Baubles and Charms, respectively.Determine the company's cash receipts for March from its current and past sales.
What will be an ideal response?
Sales in dollars per month:
| ? | Baubles | Charms | Total |
| January | 20,000 ? $30 = $ 600,000 | 36,000 ? $20 = $ 720,000 | $1,320,000 |
| February | 28,000 ? $30 = 840,000 | 60,000 ? $20 = 1,200,000 | 2,040,000 |
| March | 36,000 ? $30 = 1,080,000 | 64,000 ? $20 = 1,280,000 | 2,360,000 |
| Total | $2,520,000 | $3,200,000 | $5,720,000 |
| March cash sales (30% ? $2,360,000) …………………… | $ 708,000 |
| 70% of March credit sales (70% ? 70% ? $2,360,000) …… | 1,156,400 |
| 20% of February credit sales (20% ? 70% ? $2,040,000) … | 285,600 |
| 10% of January credit sales (10% ? 70% ? $1,320,000) … | 92,400 |
| Total March cash receipts ………………………………… | $2,242,400 |
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What will be an ideal response?
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