1 Required: 2 3 1. Enter all cells that contain question marks in worksheet '1st Part'. 4 5 2. Complete the following requirments in worksheet '2nd Part'. 6 7 8 9 10 11 The company has just hired a new marketing manager who insists that unit sales can be dramatically increased by dropping the selling price from $6 to $4. The marketing manager would like to use the following projections in the budget: Table Summary: First row of table gives budgeted unit sales for six quarters--four quarters for Year 2 and two quarters for Year 3. The spanner heading Year 2 Quarter appears over columns for four quarters. The spanner heading Year 3 Quarter appears over columns for two quarters. The second row shows the selling price per unit. 12 Budgeted unit sales 13 Selling price per unit 14 First, Reconstruct the Sales Budgets, Schuedule of Cash Collections, Production Budgets and Raw Materials Purchases budgets 15 using new budgeted units sales in '2nd part' worksheet. 16 17 Then, Answer the following Questions 18 19 a. What are the total expected cash collections for the year under this revised budget? 20 b. What is the total required production for the year under this revised budget? 21 c. What is the total cost of raw materials to be purchased for the year under this revised budget? Year 2 Quarter 1 2 4 35,000 65,000 100,000 50,000 3 $4 Year 3 Quarter 1 2 70,000 80,000 123 3 Data 4 5 Budgeted unit sales 6 7 Selling price per unit 8 Accounts receivable, beginning balance 9 Sales collected in the quarter sales are made 10 Sales collected in the quarter after sales are made 11 Desired 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 16 Raw materials inventory, beginning Raw material costs 17. Raw materials purchases are paid 18 and 19 Accounts payable for raw materials, beginning balance 20 21 Enter a formula into each of the cells marked with a ? below 22 Year 2 Quarter 1 2 30,000 50,000 $6 per unit $45,000 80% 20% Year 3 Quarter 3 4 1 2 80,000 40,000 60,000 70,000 25% of the budgeted unit sales of the next quarter 8,000 units 7 pounds 20% of the next quarter's production needs 13,000 pounds $0.70 per pound 65% in the quarter the purchases are made 35% in the quarter following purchase $71,500 23 24 Construct the sales budget 25 26 Budgeted unit sales 27 Selling price per unit 28 Total sales 1 Year 2 Quarter 2 3 4 1 Year 3 Quarter 2 30,000 $6 $180,000 50,000 $6 $300,000 80,000 $6 $480,000 40,000 $6 $240,000 60,000 $6 $360,000 70,000 $6 $420,000 29 30 Construct the schedule of expected cash collections 31 32 Accounts receivable, beginning balance 33 First-quarter sales 34 Second-quarter sales 35 Third-quarter sales 36 Fourth-quarter sales 37 Total cash collections 38 39 Construct the production budget 40 41 Budgeted unit sales 42 Add desired finished goods inventory 43 Total needs 44 Less beginning inventory 45 Required production 46 47 Construct the raw materials purchases budget 48 49 Required production (units) Year 2 Quarter 1 2 3 4 Year $ 45,000 144,000 $ $ 45,000 36,000 180,000 240,000 $ 60,000 300,000 384,000 $ 96,000 480,000 192,000 192,000 $ 189,000 $276,000 $444,000 $288,000 $1,197,000 Year 2 Quarter Year 3 Quarter 1 2 3 4 Year 2 30,000 50,000 80,000 40,000 200,000 60,000 70,000 12,500 20,000 10,000 15,000 15,000 17,500 42,500 70,000 90,000 55,000 215,000 77,500 8,000 12,500 20,000 10,000 10,000 15,000 34,500 57,500 70,000 45,000 205,000 62,500 Year 2 Quarter Year 3 Quarter 1 2 3 4 34,500 57,500 70,000 50 Raw materials required to produce one unit 7 7 7 45,000 7 Year 207,000 1 7 62,500 7 51 Production needs (pounds) 241,500 402,500 490,000 315,000 52 Add desired ending inventory of raw materials (pounds) 80,500 98,000 63,000 87,500 1,449,000 87,500 437,500 53 Total needs (pounds) 322,000 500,500 553,000 402,500 1,536,500 54 Less beginning inventory of raw materials (pounds) 13,000 ? ? ? ? 55 Raw materials to be purchased 309,000 ? ? ? ? 56 Cost of raw materials per pound 57 Cost of raw materials to be purchased 5.8 $0.70 $0.70 $0.70 $0.70 $0.70 ? ? ? Table Summary: First row of table gives budgeted unit sales for six quarters--four quarters for Year 2 and two quarters for Year 3. The spanner heading Year 2 Quarter appears over columns for four quarters. The spanner heading Year 3 Quarter 9 appears over columns for two quarters. The second row shows the selling price per unit. 10 11 12 Budgeted unit sales 13 Selling price per unit 14 First, Reconstruct the Sales Budgets, Schuedule of Cash Collections,Production Budgets and Raw Materials Purchases budgets 15 using new budgeted units sales in '2nd part' worksheet. 16 17 Then, Answer the following Questions Year 2 Quarter 1 2 3 35,000 65,000 100,000 50,000 4 $4 Year 3 Quarter 1 2 70,000 80,000