B E F H J K LMNOPQ R 1 WILLIAM COMPANY BUDGETS 2 3 4 Expected sales for January=40,000 units; February=60,000 units, William Company creates a sales budget for the first six months of 2022. March=80,000 units; April-70,000 units; May=60,000 units; and June-50,000 units. The price that William charges is $50 per unit. Create a sales budget. 5 6 7 Jan Feb Mar Apr May Jun Total JFMAMJ 8 Sales Budget Unit Sales 9 Price 000000 000000 10 Sales Revenue $0 $0 $0 $0 $0 $0 11 12 13 14 15 16 Cash Collections Budget 17 Sales Revenue William constructs a cash collections budget. The typical collection history indicates that cash is collected 60% in the month of sale and 40% is collected in the following month. Note: the sales in December were $1,800,000. Jan Feb Apr May $2,000,000 $3,000,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 Mar Jun JFMAMJ 18 Collect 60% in month 000000 19 20 Collect 40% next month Total Cash Collections 720,000 $720,000 $0 $0 $0 000000 21 22 23 24 William prepares a production budget to determine how many units of product need to be manufactured each month. William wishes to finish each month with enough ending inventory to cover 30% of the following month's sales. Note: the beginning inventory in January is 12,000 units, and the anticipated sales in July will be 40,000 units. 25 26 Production Budget Jan Feb Mar Apr May Jun July JFMAMJ 27 Unit Sales 40,000 000000 28 29 +Desired Ending Inventory_ Subtotal 0 0 0 0 0 0 30 -Beginning Inventory 31 Units to Produce 12,000 -12,000 0 0 0 0 0 000000 000001 0 0 0 0 0 000000 32 33 Note that the production budget consists of units only, no dollars. 34 35 36 37 38 William prepares a Direct Materials Budget Each unit of product in the Production Budget requires 2 pounds of direct materials at a cost of $4.00 per pound. William wants to finish each month with 20% of the next month's direct material requirement on hand. Beginning inventory of materials in January is 20% of 92,000 pounds. Assume that 50,000 pounds of material will be 39 required in July. 40 41 Direct Materials Budget Jan Feb Mar Apr May Jun July JFMAMJ 42 Units to Produce 000000 43 Direct Material Per Unit 000000 44 Material Req. for Prod. 0 0 0 0 0 0 50,000 45 + Desired End. Inv. 0 0 0 0 0 10,000 46 Total Materials Required 0 0 0 0 0 10,000 000000 47 -Beginning Direct Mtis 18,400 0 0 0 0 0 48 Pounds of Mtls to Purch. 0 0 0 0 10,000 49 Cost Per Pound $4.00 $4.00 $4.00 $4.00 $4.00 $4.00 50 Direct Materials to Purch. $0 $0 $0 $0 $0 $40,000 000000 000000 51 52 Note: I have Hfaced a few items for clarity. 53