ACC 311 Project Two Scenario You are the cost accountant at Posey's Pet Emporium tasked with preparing quarterly budgets that determine the cash effects of the company's sales and production-related expenditures. The company uses a calendar year, and it is time to prepare the third-quarter budget. You have the following information: 1. The budgeted selling price for the year is $4.99 per unit. Sales volumes are budgeted as follows for the last month of quarter two, for all of quarter three, and for part of quarter four. June July 33,500 32,000 August 35,200 September October 35,000 34,000 2. Historically, 20% of Posey's sales are cash sales. Of the remaining credit sales, 45% are collected in the month of sale, while 52% are collected the following month. The remainder is deemed uncollectible. 3. Management sets its ending finished goods inventory goal at 15% of the following month's sales volume. The accounting team expects this policy will be met at the beginning of the second quarter. 4. The target ending inventory for Posey's primary direct material is 20% of the following month's production needs. Each completed unit requires five pounds of direct materials at an expected cost of $0.25 per pound. 5. Posey's pays for 40% of its purchases in the month of purchase and 60% the month after purchase. Total budgeted purchases in June are $20,000. 6. Posey's ending cash balance on June 30 was $57,950. 7. Posey's non-production cash disbursements are estimated at $80,000 per month. Posey's Pet Emporium Budgeted selling Sales Forecast Budgeted sales volume x July August [Insert [Insert formula] formula] September Quarter price Budgeted sales [Insert [Insert formula] formula] [insert [Insert formula] [Insert formula] [Inseert [insert formula] formula] revenue [Insert formula] formula] [Insert formula] [Insert formula] Cash Receipts Budget July August September Quarter Beginning A/R (June collections) [Insert formula] [Insert formula] July cash sales [Insert formula] [Insert formula] [Insert July credit sales [Insert formula] formula] [Insert formula] [Insert August cash sales formula] [Insert formula] [Insert August credit sales formula] September cash sales [Insert formula] [Insert formula] [Insert formula] [Insert formula] September credit sales [Insert formula] [Insert formula] [Insert Total cash receipts [Insert formula] formula] [Insert formula] [Insert formula] Production Budget Budgeted sales volume Add: Target ending FG inventory Total units needed Posey's Pet Emporium July August [Insert formula] [Insert formula [Insert formula] [insert formula] September Quarter [Insert formula] [Insert formula] [insert formula] [insert formula] Less: Beginning FG inventory [Insert formula] [Insert formula] [Insert formula] [Insert formula] Budgeted units to be produced [Insert formula] [Insert formula] [Insert formula] [Insert formula] DM Purchases Budget July August September Quarter Budgeted units to be produced [insert formula] [Insert formula] [Insert formula] [Insert formula] x Pounds of DM per unit [Insert formula] [Insert formula] [Insert formula] [Insert formula] Total production needs (pounds) [Insert formula] [Insert formula] [Insert formula] [Insert formula] Add:Target ending DM [Insert formula] [Insert formula] [Insert formula] [Insert formula] inventory (pounds) Total DM inventory needs (pounds) Less: Beginning DM inventory (pounds) Budgeted pounds of DM to be purchased x DM cost per pound [Insert formula] [Insert formula] [Insert formula] [Insert formula] [Insert formula] [Insert formula] [Insert formula] [Insert formula] [Insert formula] [Insert formula] [Insert formula] [Insert formula] [Insert formula] [Insert formula] [Insert formula] [Insert formula] Total budgeted cost of DM purchases [Insert formula] [Insert formula] [Insert formula] [Insert formula]