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Data Year 2 Quarter 2 60,000 Year 3 Quarter 2 80,000 Budgeted unit sales 40,000

ID: 2555966 • Letter: D

Question

Data Year 2 Quarter 2 60,000 Year 3 Quarter 2 80,000 Budgeted unit sales 40,000 100,000 50,000 70,000 Selling price per unit Accounts receivable, beginning balance .Sales collected in the quarter sales are made Sales collected in the quarter after sales are made Desired ending finished goods inventory is Finished goods inventory, beginning Raw materials required to produce one unit Desired ending inventory of raw materials is Raw materials inventory, beginning Raw material costs Raw materials purchases are paid $8 per unit $65,000 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 and Accounts payable for raw materials, beginning balance $81,500 Enter a formula into each of the cells marked with a? below Review Problem: Budget Schedules Year 2 Quarter 2 Year 3 Quarter 2 Construct the sales budget Budgeted unit sales Selling price per unit Total sales Construct the schedule of expected cash collections Year 2 Quarter Year Accounts receivable, beginning balance First-quarter sales Second-quarter sales Third-quarter sales Fourth-quarter sales Total cash collections

Explanation / Answer

Prepartion of Sales Budget Year-2 , Quarter Year-3 Quarter 1 2 3 4 1 2 Sales Unit                40,000                60,000            100,000                50,000                70,000                80,000 Selling Price/Unit $8 $8 $8 $8 $8 $8 Budgeted Sales Value $320,000 $480,000 $800,000 $400,000 $560,000 $640,000 Schedule of Expected Cash Collection Year-2 , Quarter Year 1 2 3 4 Total Account Receivable, Beginning Balance $65,000 $65,000 First Quarter Sales $240,000 $80,000 $320,000 Second Quarter Sales $360,000 $120,000 $480,000 Third Quarter Sales $600,000 $200,000 $800,000 Fourth Quarter Sales $300,000 $300,000 Total Cash Collection $305,000 $440,000 $720,000 $500,000 $1,965,000 Schedule of Production Budget Year-2 , Quarter Year-3 Quarter 1 2 3 4 1 2 Add: Sales Unit              320,000             480,000            800,000              400,000              560,000              640,000 Less Ending Inventory (30% of Next Quarter Sales)              144,000             240,000            120,000              168,000              192,000                         -   Total Needs              464,000             720,000            920,000              568,000              752,000              640,000 Less: Beginning Inventory                12,000             144,000            240,000              120,000              168,000              192,000 Production Unit              452,000             576,000            680,000              448,000              584,000              448,000 Schedule of Raw Material Purchase Budget Year-2 , Quarter Year-3 Quarter 1 2 3 4 1 2 Production Unit              452,000             576,000            680,000              448,000              584,000              448,000 Add: Raw material Rquired for Prodcution Unit @ 5 Pound/Unit          2,260,000          2,880,000        3,400,000          2,240,000          2,920,000          2,240,000 Less: Ending Inventory ( in Pound) 10% of Next Quarter              288,000             340,000            224,000              292,000              224,000                         -   Total Needs in Pound          2,548,000          3,220,000        3,624,000          2,532,000          3,144,000          2,240,000 Less: Beginning Inventory (in Pound)                23,000             288,000            340,000              224,000              292,000              224,000 Total Raw Material Purchase ( Pound)          2,525,000          2,932,000        3,284,000          2,308,000          2,852,000          2,016,000 Price/Pound $0.80 $0.80 $0.80 $0.80 $0.80 $0.80 Total Raw Material Purchase Cost $2,020,000 $2,345,600 $2,627,200 $1,846,400 $2,281,600 $1,612,800 Schedule of Expected Cash Payment Year-2 , Quarter Year 1 2 3 4 Total Account payable, Beginning Balance $81,500 $81,500 First Quarter Purchase $1,212,000 $808,000 $2,020,000 Second Quarter Purchase $1,407,360 $938,240 $2,345,600 Third Quarter Purchase $1,576,320 $1,050,880 $2,627,200 Fourth Quarter Purchase $1,107,840 $1,107,840 Total Cash Collection $1,293,500 $2,215,360 $2,514,560 $2,158,720 $8,182,140