a.	What are the total expected cash collections for the year under this revised budget?

b.	What is the total required production for the year under this revised budget?

c.	What is the total cost of raw materials to be purchased for the year under this revised budget?

d.	What are the total expected cash disbursements for raw materials for the year under this revised budget?

e.

After seeing this revised budget, the production manager cautioned that due to the current production constraint, a complex milling machine, the plant can produce no more than 80,000 units in any one quarter. Is this a potential problem?

	Yes
	No

Requirement 2 The company has just hired a new marketing manager who insists that unit sales can be dramatically increased by dropping the selling price from $8 to $7. The marketing manager would like to use the following projections in the budget: Year 2 Quarter Year 3 Quarter Budgeted unit sales Selling price per unit 50,000 70,000 110,000 60,000 80,000 90,000 $7 per unit Chapter 7: Applying Excel 3 Data 5 Budgeted unit sales Year 2 Quarter 2 70,000 Year 3 Quarter 50,000 110,000 60,000 80,000 90,000 7Selling price per unit 8Accounts receivable, beginning balance 9Sales collected in the quarter sales are made 0Sales collected in the quarter after sales are made S8 per unit $65,000 75% 25 11Desired ending finished goods inventory is 30% of the budgeted unit sales of the next quarter 12,000units 12 .Finished goods inventory, beginning 13Raw materials required to produce one unit 14 Desired ending inventory of raw materials is 15 Raw materials inventory, beginning 6Raw material costs 17 Raw materials purchases are paid 18 and 5 pounds 10% of the next quarter's production needs 23,000pounds $0.80 per pound 60% in the quarter the purchases are made 40% in the quarter following purchase Accounts payable for raw materials, beginning 19 balance 20 $81,500