Chapter 8: Applying Excel: Exercise (Part 2 of 2) 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: Data Budgeted unit sales Selling price per unit 1 45,000 Year 2 Quarter 2 3 70,000 120, 000 Year 3 Quarter 1 2 80, 000 95,000 60,000 E F G Chapter 8: Applying Excel 1 3 Data 1 45,000 2 2 70,000 3 120,000 Year 3 Quarter 4 1 60,000 80,000 5 Budgeted unit sales 95,000 $ 10 11 12 13 Selling price per unit Accounts receivable, beginning balance Sales collected in the quarter sales are made Sales collected in the quarter after sales are made . Desired ending finished goods inventory is . Finished goods inventory, beginning Raw materials required to produce one unit Desired ending inventory of raw materials is Don Raw materials inventory, beginning Raw material costs Raw materials purchases are paid and Accounts payable for raw materials, beginning balance 7 per unit 65,000 75% 25% 30% of the budgeted unit sales of the next quarter 12,000 units 5 pounds 10% of the next quarter's production needs 23,000 pounds 0.80 per pound 60% in the quarter the purchases are made 40% in the quarter following purchase 81,500 14 $ 17 19 $ a. What are the total expected cash collections for the year under this revised budget? Expected cash collections for the year b. What is the total required production for the year under this revised budget? Total required production for the year c. What is the total cost of raw materials to be purchased for the year under this revised budget? Total cost of raw materials to be purchased for the year d. What are the total expected cash disbursements for raw materials for the year under this revised budget? Total expected cash disbursements for raw materials for the year 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 90,000 units in any one quarter. Is this a potential problem? Yes