Data Year 2 Quarter Year 3 Ouarter Budgeted unit sales 50,000 110,000 70,000 90,
ID: 2557474 • Letter: D
Question
Data Year 2 Quarter Year 3 Ouarter Budgeted unit sales 50,000 110,000 70,000 90,000 90,000 $7 per unit 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 firished goods inventory is Finished goods inventory, beginning Raw materials required to produce one unit Desired ending inven.ory of raw materials is Raw materials inventary Raw material costs Raw materials purchases are pa 565,000 25% 30% of the budgeted unit sales of the next quarter 12000 units 5 pounds 10% of the next quarter's production needs 23,000 pounds 0.80 per pound id 60% in the quarter the purchases are made 40% in the quarter following purchase Accounts payable for raw materials, beginning balance 581,500 Enter a formula into each of the cells marked with a? below Review Problem: Budget Schedules Construct the sales budget Budgeted unit sales Year 2 Quarter Year 3 Quarter 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 Construct the production budget Year 2 Quarter Year 3 Quarter Year Budgeted unit sales Add desired finished goods i Total needs Less beginning Required productian Construct the raw materials purchases budget Year 2 Quarter Year 3 Quarter Year Required productian (units) Raw materials required to produce one unit Production needs (pounds) Add desired ending inventory of raw Total needs (pounds) Less beginning inventory of raw materials (pounds) Raw materials to be purchased Cost of raw materials per pound Cost of raw materials to be purchased Construct the schedule of expected cash payments Year 2 Quarter Year Accounts payable, beginning balance First-quarter purchases Second-quarter purchases Total cash disbursementsExplanation / Answer
Solution:
Sales Budget
Year 2 Quarter
Year 3 Quarter
1
2
3
4
1
2
Budgeted Unit Sales
50000
70000
110000
70000
90000
90000
Selling Price per unit
$7
$7
$7
$7
$7
$7
Total Sales
$350,000
$490,000
$770,000
$490,000
$630,000
$630,000
Schedule of Expected Cash Collections
Year 2 Quarter
1
2
3
4
Year
Accounts receivable, beginning balance
$65,000
First quarter sales
$262,500
87500
Second Quarter Sales
367500
$122,500
3 Quarter Sales
$577,500
$192,500
4 Quarter Sales
$367,500
Total Cash Collections
$327,500
$455,000
$700,000
$560,000
$2,042,500
Production Budget
Year 2 Quarter
Year 3 Quarter
1
2
3
4
Year
1
2
Budgeted Unit Sales
50000
70000
110000
70000
300000
90000
90000
Add: Desired finished goods inventory (30% of the next quarter sales units)
21000
33000
21000
27000
27000
27000
Total needs
71000
103000
131000
97000
327000
117000
Less: beginning inventory (beginning inventory of last month)
12000
21000
33000
21000
12000
27000
Required Production
59000
82000
98000
76000
315000
90000
Raw materials purchases budget
Year 2 Quarter
Year 3 Quarter
1
2
3
4
Year
1
Required Production (units)
59000
82000
98000
76000
315000
90000
Raw material required to produce one unit
5
5
5
5
5
5
Production Needs (pounds)
295000
410000
490000
380000
1575000
450000
Add: Desired Ending Raw Material Inventory (10% of next quarter's production need)
41000
49000
38000
45000
45000
Total Needs (Pounds)
336000
459000
528000
425000
1620000
Less: Beginning Raw material inventory (ending inventory of last month)
23000
41000
49000
38000
23000
Raw materials to be purchased
313000
418000
479000
387000
1597000
Cost of raw materials per pound
$0.80
$0.80
$0.80
$0.80
$0.80
Cost of raw materials to be purchased
$250,400
$334,400
$383,200
$309,600
$1,277,600
Schedule of expected cash payments
Year 2 Quarter
1
2
3
4
Year
Accounts Payable, beginning balance
$81,500
1-quarter purchases
$150,240
100160
2-quarter purchases
200640
$133,760
3-quarter purchases
$229,920
$153,280
4-quarter purchases
$185,760
Total Cash disbursements
$231,740
$300,800
$363,680
$339,040
$1,235,260
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Sales Budget
Year 2 Quarter
Year 3 Quarter
1
2
3
4
1
2
Budgeted Unit Sales
50000
70000
110000
70000
90000
90000
Selling Price per unit
$7
$7
$7
$7
$7
$7
Total Sales
$350,000
$490,000
$770,000
$490,000
$630,000
$630,000
Schedule of Expected Cash Collections
Year 2 Quarter
1
2
3
4
Year
Accounts receivable, beginning balance
$65,000
First quarter sales
$262,500
87500
Second Quarter Sales
367500
$122,500
3 Quarter Sales
$577,500
$192,500
4 Quarter Sales
$367,500
Total Cash Collections
$327,500
$455,000
$700,000
$560,000
$2,042,500
Production Budget
Year 2 Quarter
Year 3 Quarter
1
2
3
4
Year
1
2
Budgeted Unit Sales
50000
70000
110000
70000
300000
90000
90000
Add: Desired finished goods inventory (30% of the next quarter sales units)
21000
33000
21000
27000
27000
27000
Total needs
71000
103000
131000
97000
327000
117000
Less: beginning inventory (beginning inventory of last month)
12000
21000
33000
21000
12000
27000
Required Production
59000
82000
98000
76000
315000
90000
Raw materials purchases budget
Year 2 Quarter
Year 3 Quarter
1
2
3
4
Year
1
Required Production (units)
59000
82000
98000
76000
315000
90000
Raw material required to produce one unit
5
5
5
5
5
5
Production Needs (pounds)
295000
410000
490000
380000
1575000
450000
Add: Desired Ending Raw Material Inventory (10% of next quarter's production need)
41000
49000
38000
45000
45000
Total Needs (Pounds)
336000
459000
528000
425000
1620000
Less: Beginning Raw material inventory (ending inventory of last month)
23000
41000
49000
38000
23000
Raw materials to be purchased
313000
418000
479000
387000
1597000
Cost of raw materials per pound
$0.80
$0.80
$0.80
$0.80
$0.80
Cost of raw materials to be purchased
$250,400
$334,400
$383,200
$309,600
$1,277,600
Schedule of expected cash payments
Year 2 Quarter
1
2
3
4
Year
Accounts Payable, beginning balance
$81,500
1-quarter purchases
$150,240
100160
2-quarter purchases
200640
$133,760
3-quarter purchases
$229,920
$153,280
4-quarter purchases
$185,760
Total Cash disbursements
$231,740
$300,800
$363,680
$339,040
$1,235,260
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