2. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter.BUDGETING Problem 1(Sales Budget) Compute the budgeted sales for the first three months of the year under the following scenarios: 1. The expected sales volume is 3,000 units in January with 500-unit increments for each following months. Unit Sales price is P60.00 per unit 2. The expected sales volume is 4,000 units in January and a growth rate of 5% per month thereafter. Selling price is P20.00 per unit. 3. The following sales budget (in units) are expected for the first quarter - January 30,000 units; February 45,000 units, and March 60,000 units. The selling price per unit is P10.00 per unit. 20% of total sales are on cash with the remaining on credit. Problem 2: (Production Budget) Bell Telecom has budgeted sales of its innovative mobile phone for next four month as follows: Sales Budget in Units July 30.000 August 45.000 September 60,000 October 50,000 The company is now in the process of preparing a production budget for the third quarter. Ending inventory level must equal 10% of the next month's sales. Required: Prepare a production budget for the third quarter, in your budget show the number of units to be produced each month and for the quarter in total. Problem 3: (Purchase Budget) Makati Manufacturing Company has budgeted production for next year as follows. First Second Third Fourth Quarter Quarter Quarter Quarter Production in Units 80,000 96.000 128,000 112,000 Ten pounds of raw materials are required for each unit produced. Raw materials on hand at the beginning of the year total 20,000 lbs. The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs. Required: Prepare a direct materials budget for the second quarter. Problem 4: (Purchase Budget) Bataan Products has developed a very powerful electronic calculator. Each calculator requires three small chips that cost P2.00 each and are purchased from an overseas supplier. Bataan Products has prepared a production budget for the calculator by quarters for Year 2 and for the first quarter of Year 3, as follows: Year 2 Year 3 First Second Third Fourth First Budgeted productions, in calculators 60,000 90.000 150,000 100,000 80.000 1 | Module 2: Budgeting and ForecastingThe inventory of the chips at the end of a quarter must be equal to 20% of the following quarter's production needs. There will be 36,000 chips on hand to start the first quarter of Year 2. Required: Prepare direct materials budget for the chips, by quarter and in total, for Year 2 including the peso amount of purchases for each quarter and for the year in total Problem 5: (Production & Purchase Budget) A budgeted sales for the first five months of 2012 for a particular product line manufactured by Bulacan Corporation follows: January February March April May Sales (in Units) 10,800 15,600 12.200 10,400 9,800 Additional Information: The inventory of finished product at the end of each month is to be equal to 25% of the sales estimate for the next month. On January 1, there were 2,700 units of product on hand Assume that there is no-work in process. Each unit of product requires two types of materials: 4 units of Type A and 5 units of Type B. Materials equal to one-half of the next month's requirements are to be on hand at the end of each month. This requirement was met during December 2011. Required: Prepare a budget showing the munber of units to be produced and the quantities of each type of materials to be purchased each month for the first quarter of 2012. Problem 6: (Direct Labor) The production department of the Company B has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year. First Second Third Fourth Units to be produced 10,000 8.000 3.500 9,000 Each unit requires 0.6 direct labor-hours and at a cost of P15.00 per direct labor hour. The workforce can be adjusted each quarter for the expected production level Required: Prepare the company's direct labor budget for the upcoming fiscal year. Problem 7: (Manufacturing Overhead) Davey Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable factory overhead rate is P3.00 per direct labor-hour; the budgeted fixed factory overhead is P 66,000 per month, of which P 10,000 is factory depreciation Required: Determine the budgeted overhead for the month under the following budgeted production: 10,000 units, 20,000 units, and 30,000 units and assuming that one unit requires 2 direct labor hours. Problem 8: (Cash Budget - Receipts) Company A is expecting to sell 10,000 cases in July, 20,000 cases in August, and 30,000 in September of Year 2. Selling price per case is P30. All sales are on account. The sales are collected 70% in the month of sale and 30% in the month following sale. June sales totaled P200,000. Bad debts are negligible and can be ignored. Required: 1. Prepare a sales budget. 2 | Module 2: Budgeting and Forecasting