1 Chapter 3: Applying Excel, ASSIGNMENT REQUIRED: 1. Create a budget for your company using the excel template provided given all of the assumptions listed below. 2. Use your budget to answer the questions listed below your bduget template. Data Year 2 Quarter Year 3 Quarter 1 2 3 4 1 Budgeted unit sales 55,000 67,000 95,500 68,000 75,000 87.000 Selling price per unit $9 Accounts receivable, beginning balance $45.000 Sales collected in the quarter sales are made 75% Sales collected in the quarter after sales are made 25% Desired ending finished goods inventory is 15% of the budgeted unit sales of the next quarter Finished goods inventory, beginning 15.000 units Raw materials required to produce one unit 6 pounds Desired ending inventory of raw materials is 20% of the next quarter's production needs Raw materials inventory, beginning 13,000 pounds Raw material costs $0.85 per pound Raw materials purchases are paid 80% in the quarter the purchases are made and 20% in the quarter following purchase Accounts payable for raw materials, beginning balance $83,500 Enter a formula into each of the cells marked with a ? below Review Problem: Budget Schedules Construct the sales budget Year 2 Quarter Year 3 Quarter 2 3 1 2 Budgeted unit Sales ? ? ? 21 2 Selling price per unit 2 21 21 21 Total sales 21 ? ? Construct the schedule of expected cash collections Year 2 Quarter 1 2 3 Year Beginning balance accounts receivable ? 2 First quarter sales ? ? 7 Second-quarter sales ? ? 7 Third-quarter sales ? ? 2 Fourth-quarter sales ? 2 Total cash collections ? Construct the production budget Year 2 Quarter Year 3 Quarter 1 2 3 Year Budgeted unit sales ? ? 2 ? 2 2 Add desired ending finished goods inventory ? ? 2 ? 2 2 Total needs ? 2 ? ? Less beginning finished goods inventory 3 ? ? Required production in units ? Construct the raw materials purchases budget Year 2 Quarter Year 3 Quarter 1 2 3 4 Year Required production (units) 2 2 ? ? 2 2 Raw materials required to produce one unit (pounds) ? ? 2 7 ? 2 Production needs (pounds) ? ? ? ? ? 7 Add desired ending inventory of raw materials (pounds) ? ? ? ? ? Total needs (pounds) ? ? ? ? 2 Less beginning inventory of raw materials (pounds) ? ? ? ? ? Raw materials to be purchased (pounds) 2 ? ? ? ? Cost of raw materials per pound ? 2 ? ? ? Cost of raw materials to be purchased ? 2 ? ? ? Construct the schedule of expected cash payments Year 2 Quarter 1 2 3 Year Beginning balance accounts payable ? First quarter purchases 2 ? ? Second-quarter chases ? ? ? Third-quarter purchases ? ? ? Fourth-quarter purchases ? ? Total cash disbursements ? ? ? ? ? What are the total expected cash collections for the year? b. What is the total required production for the year? Page 1 Data Year 3 Quarter 2 75,000 87 000 Budgeted unit sales Selling price per unit Accounts receivable beginning balarce 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 invertory 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 and 1: Accounts payable for raw materials, beginning balance Enter a formula into each of the cells marked with a ? below Review Problem: Budget Schedules Construct the sales budget Year 2 Quarter 1 2 4 55,000 67 000 95.500 68 000 $9 $45,000 75% 25% 15% of the budgeted unit sales of the next quarter 15.000 units 6 pounds 20% of the next quarter's production needs 13.000 pounds 0.85 per pound 80% in the quarter the purchases are made 20% in the quarter following purchase $83.500 Year 2 Quarter 2 3 Year 3 Quarter 1 2 2 ? 7 Budgeted unit sales Seling price per unit Total sales Construct the schedule of expected cash collections Year 2 Quarter 2 3 Year ? 7 Beginning balance accounts receivable First quarter sales Second-quarter sales Third-quarter sales Fourth quarter sales Total cash collections Construct the production budget ? 2 2 ? Year 2 Quarter 2 3 1 Year 2 ? 2 2 2 2 Year 3 Quarter 1 2 ? ? ? 2 ? ? 2 Year 3 Quarter 2 ? 2 ? ? 2 2 ? ? 2 2 2 ? ? 2 ? ? Year 2 Quarter 2 3 2 4 Year ? ? 2 ? ? 2 2 ? Budgeted unit sales Add desired ending finished goods inventory Total needs Less beginning finished goods inventory Required production in units Construct the raw materials purchases budget Required production units) Raw materials required to produce one unit (pounds) Production needs (pounds) Add desired ending inventory of raw materials (pounds Total needs (pourds) Less beginning inventory of raw materials (pounds Raw materials to be purchased (pounds) Cost of raw materials per pourd Cost of raw materials to be purchased Construct the schedule of expected cash payments Beginning balance accounts payable First quarter purchases Second quarter purchases Third-quarter purchases Fourth quarter purchases Total cash disbursements ? 7 2 ? 2 ? 2 ? ? 7 2 ? 7 ? ? 72 2 2 2 2 ? 2 ? 2 2 2 2 ? ? ? ? ? ? ? 21 Year 2 Quarter 2 3 4 Year ? ? 2 ? ? 7