1/What are the total expected cash collections for the year under this revised b

Question

1/What are the total expected cash collections for the year under this revised budget?

Expected cash collections for yesr is_____

2/What is the total required production for the year under this revised budget?

Total required production for the year____

3/What is the total cost of raw materials to be purchased for the year under this revised budget?

Total cost of raw materials to be purchased for the year under this revised budget___

4/ What are the total expected cash disbursements for raw materials for the year under this revised budget?

Total expected cash disbursements for raw materials for the year___

3/What is the total cost of raw materials to be purchased for the year under this revised budget?

Total cost of raw materials to be purchased for the year under this revised budget___

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 S7. The marketing manager would like to use the following projections in the budget ear 2 Budgeted unit sales Selling price per unit 0,000 65,000 115,000 60,000 85,000 100,000 $7 per unit 1 Chapter 7: Applying Excel 3 Data 5 Budgeted unit sales Selling price per unit Year 2 Quarter Year 3 Quarter 65,000 115,000 60,000 100,000 58 per unit 8Accounts receivable, beginning balance $65,000 Sales collected in the quarter sales are made 10 Sales collected in the quarter after sales are made 1Desired ending finished goods inventory is 2 Finished goods inventory, beginning 3 Raw materials required to produce one unt 4 Desired ending inventory of raw materials is 5 Raw materials inventory, beginning 16 Raw material costs 75% | 25% 30% of the budgeted unit sales of the next quarter 12,000 units 5 pounds 10% of the next quarters production needs 23,000 pounds Raw materials purchases are paid 18 and $0.80 per pound 60% in the quarter the purchases are made 40% in the quarter following purchase 19.Accounts payable for raw materials, beginning balance $81,500 20

Explanation / Answer

EXPECTED CASH COLLECTIONS Q1 Q2 Q3 Q4 TOTAL Begnning Balance of Accounts recievable 65,000 65000 Sales of Quarter-1 (50000 units @7) 262,500 87500 350000 Sales of Q-2 (65000 units @$7) 341250 113750 455000 Sales of Q3 (115000 units @$7) 603,750 201,250 805000 Sales in Q4 (60000 units @$7) 315,000 315000 Total Cash Collections 327,500 428,750 717,500 516,250 1990000 PRODUCTION BUDGET Q1 Q2 Q3 Q4 Year Q1 Q2 Budgeted Sales Units 50,000 65,000 115,000 60,000 290,000 85,000 100,000 Add: Desired Ending Finished inventory 19,500 34,500 18,000 25,500 25,500 30,000 Total Needs 69,500 99,500 133,000 85,500 315,500 115,000 Less: Beginning Finished Inventory 12,000 19,500 34,500 18,000 12,000 25,500 Required Production in units 57,500 80,000 98,500 67,500 303,500 89,500 RAW MATERIAL PURCHASE BUDGET Q1 Q2 Q3 Q4 Year Q1 Budgeted Production units 57,500 80,000 98,500 67,500 303,500 89,500 Raw material required per unit 5 5 5 5 5 5 Production needs 287,500 400,000 492,500 337,500 1,517,500 447,500 Add: Ending inventory 40,000 49,250 33,750 44,750 44,750 Total needs 327,500 449,250 526,250 382,250 1,562,250 Less: Beginning Inventory 23,000 40,000 49,250 33,750 23,000 Purchase Units 304,500 409,250 477,000 348,500 1,539,250 Cost price per unit 0.80 0.80 0.80 0.80 0.80 Budgeted Purchase in $ 243,600 327,400 381,600 278,800 1,231,400 0 EXPECTED CASH PAYMENTS Q1 Q2 Q3 Q4 TOTAL Begnning Balance of Accounts payable 81,500 81500 Purchasse of Q-1 146,160 97440 243600 Purchase of Q-2 196440 130960 327400 Purchasse of Q-3 228,960 152,640 381600 Purchase of Q-4 167,280 167280 Total Cash Collections 227,660 293,880 359,920 319,920 1201380

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