Data 1 40,000 Year 2 Quarter 2 3 60,000 100,000 Year 3 Quarter 1 2 70,000 80,000 4 50,000 Budgeted unit sales $8 per unit $65,000 . 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 Raw materials inventory, beginning . Raw material costs Raw materials purchases are paid and Accounts payable for raw materials, beginning balance 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 Enter a formula into each of the cells marked with a ? below Review Problem: Budget Schedules Construct the sales budget Budgeted unit sales Selling price per unit Total sales 1 40,000 $8 $320,000 Year 2 Quarter 2 3 60,000 100,000 $8 $8 $480,000 $800,000 4 50,000 $8 $400,000 Year 3 Quarter 1 2 70,000 80,000 $8 $8 $560,000 $640,000 Construct the schedule of expected cash collections $ Accounts receivable, beginning balance First-quarter sales Second-quarter sales Third-quarter sales Fourth-quarter sales Total cash collections Year 2 Quarter 1 2 3 4 Year 65,000 $ 65,000 240,000 $ 80,000 320,000 360,000 $ 120,000 480,000 600,000 $ 200,000 800,000 300,000 300.000 305,000 $ 440,000 $ 720,000 $ 500,000 $ 1,965,000 $ Construct the production budget Budgeted unit sales Add desired finished goods inventory Total needs Less beginning inventory Required production 1 320,000 144,000 464,000 12.000 452,000 Year 2 Quarter 3 480,000 800,000 240,000 120,000 720,000 920,000 144,000 240,000 576,000 680,000 4 400,000 600,000 1,000,000 120,000 880,000 Year 2,000,000 1,104,000 3,104,000 516.000 2,588,000 Year 3 Quarter 1 2 560,000 640,000 192,000 752,000 600,000 152.000 Construct the raw materials purchases budget Year 3 Quarter 1 152,000 5 760,000 1 452,000 5 2,260,000 288,000 2,548,000 Required production (units) Raw materials required to produce one unit Production needs (pounds) Add desired ending inventory of raw materials (pounds) Total needs (pounds) Less beginning inventory of raw materials (pounds) Raw materials to be purchased Cost of raw materials per pound Cost of raw materials to be purchased Year 2 Quarter 2 3 576,000 680,000 5 5 2,880,000 3,400,000 340,000 440,000 3,220,000 3,840,000 288,000 340,000 2,932,000 3,500,000 $0.80 $0.80 $2.345,600 $2,800,000 4 880,000 5 4,400,000 1.294,000 5,694,000 440,000 5,254,000 $0.80 $4,203,200 Year 2,588,000 5 12,940,000 2,362,000 15,302,000 1,091,000 14,211,000 $0.80 $11,368,800 23,000 2,525,000 $0.80 $2.020,000 Construct the schedule of expected cash payments 1 Accounts payable, beginning balance First quarter purchases Second-quarter purchases Third-quarter purchases Fourth-quarter purchases Total cash disbursements Year 2 Quarter 2 3 4 Year $ 81,500 $ 81,500 1,212,000 $ 808,000 2,020,000 1,407,360 $ 938,240 2,345,600 1,680,000 $ 1,120,000 2,800,000 2,521,920 2,521,920 $ 1.293,500 $ 2,215,360 $ 2,618,240 $ 3,641,920 $ 9,769,020 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 $7 Year 2 Quarter 2 3 70,000 105,000 4 65,000 Year 3 Quarter 1 2 90,000 95,000 A B D E F G 1 Chapter 8: Applying Excel 2 3 Data Year 3 Quarter 4 1 2 3 4 1 2 5 Budgeted unit sales 45,000 70,000 105,000 65,000 90,000 95,000 6 $ 7 per unit 65,000 $ 75% 25% 7. Selling price per unit Accounts receivable, beginning balance 9 Sales collected in the quarter sales are made 10 Sales collected in the quarter after sales are made 11 . Desired ending finished goods inventory is 12 Finished goods inventory, beginning 13 Raw materials required to produce one unit 14 Desired ending inventory of raw materials is 15 Raw materials inventory, beginning 16 . Raw material costs 17 Raw materials purchases are paid 18 and 19 Accounts payable for raw materials, beginning balance 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 $ $ 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 80,000 units in any one quarter. Is this a potential problem? Yes