Calculate the cash that tab comp

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Reference no: EM1313086

Compute the number of orders placed in the month of January and cash collected in the month of April as details furnished below

Tab Comp Inc. is a retail distributor for MZB-33 computer hardware and related software. Tab Comp prepares annual sales forecasts of which the first six months of the coming year are presented below.

	Hardware Units	Hardware Dollars	Software	Total Sales
January	130	$390,000	$160,000	$550,000
February	120	$360,000	$140,000	$500,000
March	110	$330,000	$150,000	$480,000
April	90	$270,000	$130,000	$400,000
May	100	$300,000	$125,000	$425,000
June	125	$375,000	$225,000	$600,000

Cash sales account for 25% of Tab Comp's total sales, 30% of the total sales are paid by bank credit card, and the remaining 45% are on open account (Tab Comp's own charge accounts). The cash and bank credit card sale payments are received in the month of the sale. Bank credit card sales are subject to a 4 % discount which is deducted immediately. The cash receipts for sales on open account are 70% in the month following the sale, 28% in the second month following the sale, and the remaining are uncollectible.
Tab Comp's month-end inventory requirements for computer hardware units are 30% of the next month's sales. The units must be ordered two months in advance due to long lead times quoted by the manufacturer.

Required:

a. Calculate the cash that Tab Comp can expect to collect during April. Show all of your calculations.

b. Determine the number of computer hardware units that should be ordered in January. Show all of your calculations.

Reference no: EM1313086

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