1. The sales manager would like to increase the sales price by 10 next quarter, what will be the projected revenues be for the 2nd quarter.

2. The production manager would like to purchase new equipment for next quarter due to the fact that their competitor has purchased equipment which cost $50,000. Will the company be able to make the purchase or will you need more information?

3. The CEO feels that the cash budget is not necessary, please explain to the CEO why cash budgeting is important to the organization.

4. Please explain to the management team how a competitor’s actions can affect business planning.

McClosky Corporation Sales Budget Req A Calculation January February March April May June First Quarter January February March April May June Sales units 9,000 11,000 16,000 14,000 13,000 12,000 36,000 Selling price per unit 15 15 15 15 15 15 15 Total budgeted sales 135,000 165,000 240,000 210,000 195,000 180,000 540,000 9000*15 11000*15 16000*15 14000*15 13000*15 12000*15 Schedule of Cash Receipts Calculation Req A1 January February March First Quarter January February March Collection in the month of sale 94,500 115,500 168,000 378,000 135000*70% 165000*70% 240000*70% Collection in the first month after the sale 17,000 27,000 33,000 77,000 =85000*20% 135000*20% 165000*20% Collection in the second month after the sale 9,000 8,500 13,500 31,000 =90000*10% =85000*10% 135000*10% Total Cash Receipts 120,500 151,000 214,500 486,000 Production budget Reg B January February March April May June First Quarter January February March April May June Sales units 9,000 11,000 16,000 14,000 13,000 12,000 36,000 Desired ending inventory 550 800 700 650 600 600 700 11000*5% 16000*5% 14000*5% 13000*5% 12000*5% 12000*5% Total units available for sale 9,550 11,800 16,700 14,650 13,600 12,600 36,700 Less: Estimated Beginning inventory 500 550 800 700 650 600 500 End Inv of Jan End Inv of Feb End Inv of Mar End Inv of Apr End Inv of May Total units to be produced 9,050 11,250 15,900 13,950 12,950 12,000 36,200 Direct Materials Purchase Budget Req C Units to be produced Materials required per unit January February March April May June First Quarter January February March April May June 9,050.00 11,250.00 15,900.00 13,950.00 12,950.00 12,000.00 36,200.00 1.40 1.40 1.40 1.40 1.40 1.40 1.40 Materials required for Production Desired ending inventory 12,670.00 15,750.00 22,260.00 19,530.00 18,130.00 16,800.00 50,680.00 9050*1.4 11250*1.4 15900*1.4 13950*1.4 12950*1.4 12000*1.4 787.50 1,113.00 976.50 906.50 840.00 976.50 15750*5% 22260*5% 19530*5% 18130*5% 16800*5% Total Materials available for sale 13,457.50 16,863.00 23,236.50 20,436.50 18,970.00 51,656.50 Less: Estimated Beginning inventory 1,100.00 787.50 1,113.00 976.50 906.50 1,100.00 End Inv of Jan End Inv of Feb End Inv of Mar End Inv of Apr Total Materials to be purchased 12,357.50 16,075.50 22,123.50 19,460.00 18,063.50 50,556.50 Cost per pound 0.90 0.90 0.90 0.90 0.90 0.90 Cost of direct Materials to be purchased 11,121.75 14,467.95 19,911.15 17,514.00 16,257.15 45,500.85 12357.5*0.9 16075.5*0.9 22123.5*0.9 19460*0.9 18063.5*0.9 Schedule of Cash Payments for raw materials Req C1 January February March First Quarter January February March Payment in the month of purchase 6,673 8,681 11,947 27,301 11121.75*60% 14467.95*60% 19911.15*60% Payment in the month after purchase 2,650 4,449 5,787 12,886 11121.75*40% 14467.95*40% Total Cash Payments for raw materials 9,323 13,129 17,734 40,186