I got part A right, I need help with B, C, and D. I have attached some of the wo
ID: 2432741 • Letter: I
Question
I got part A right, I need help with B, C, and D. I have attached some of the work I have already done for this problem below.
Requirement 2 The company has just hired a new marketing manager who insists that unit sales can be dramatically increased by dropping the selling price from $8 to $7. The marketing manager would like to use the following projections in the budget: Data Year 2 Quarter Year 3 Quarter 2 4 50,000 70,000 120,000 75,000 85,000 100,000 Budgeted unit sales Selling price per unit $7 per unit 1 Chapter 7: Applying Excel 2 3 Data Year 2 Quarter 2 70,000 Year 3 Quarter 2 100,000 5 Budgeted unit sales 50,000 120,000 75,000 85,000 7Selling price per unit $8 per unit $65,000 8Accounts receivable, beginning balance 9. Sales collected in the quarter sales are made 10.Sales collected in the quarter after sales are made 11Desired ending finished goods inventory is 12 .Finished goods inventory, beginning 13 .Raw materials required to produce one unit 14 .Desired ending inventory of raw materials is 15 .Raw materials inventory, beginning 6Raw material costs 17.Raw materials purchases are paid 18 and 19Accounts payable for raw materials, beginning balance 20 75% 25% 30% of the budgeted unit sales of the next quarter 12,000 units 5 pounds 10% of the next quarter's production needs 23,000 pounds $0.80 per pound 60% in the quarter the purchases are made 40% in the quarter following purchase $81,500Explanation / Answer
(b) Total Units required production for the year :-
Q1
Q2
Q3
Q4
Year 2
Budgeted Unit Sales
50000
70000
120000
75000
(+) Desired Ending
21000
36000
22500
(85000 * 30%)
=25500
(-) Beginning Inventory
12000
21000
36000
22500
Units required production
59000
85000
106500
78000
328500
(c) Total Cost of RM to be purchased for the year :-
Q1
Q2
Q3
Q4
Year 2
Units required production
59000
85000
106500
78000
RM consumption
(59000 * 5)
=295000
(85000 * 5)
=425000
(106500 * 5)
=532500
(78000 * 5)
=390000
(+)Desired Ending
(425000 * 10%)
42500
(532500 * 10%)
=53250
(390000 * 10%)
=39000
(447500 * 10%)
=44750
(-)Beginning Inventory
23000
42500
53250
39000
RM to be purchased
314500
435750
518250
395750
RM cost per pound ($)
0.80
0.80
0.80
0.80
Cost of RM to be purchased ($)
251600
348600
414600
316600
1331400
Production need for 1st Qtr of 3rd year = Budgeted unit sales + Desired Ending – Beginning
= 85000 + (100000 * 30%) – 25500 = 89500
RM for 1st Qtr of 3rd year = 89500 * 5 = 447500
(d) Total Expected Cash disbursement for RM for the year :-
Q1
Q2
Q3
Q4
Year 2
Acc. Payable Beg. Bal.
81500
0
0
0
81500
1st Quarter
(251600 * 60%)
=150960
(251600 * 40%)
=100640
0
0
251600
2nd Quarter
0
(348600 * 60%)
=209160
(348600 * 40%)
=139440
0
348600
3rd Quarter
0
0
(414600 * 60%)
=248760
(414600 * 40%)
=165840
414600
4th Quarter
0
0
0
(316600 * 60%)
=189960
189960
232460
309800
388200
355800
1286260
Q1
Q2
Q3
Q4
Year 2
Budgeted Unit Sales
50000
70000
120000
75000
(+) Desired Ending
21000
36000
22500
(85000 * 30%)
=25500
(-) Beginning Inventory
12000
21000
36000
22500
Units required production
59000
85000
106500
78000
328500
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