E F No Video G H 1 Year 1 Quarter 2 Year 2 Quarter 3 1 2 60,000 75,000 90,000 80,000 90,000 100,000 $7 per unit A B C 1 Budgeting 2 3 Data 4 5 Budgeted unit sales 6 7 Selling price per unit 8 Accounts receivable, beginning balance 9 Sales collected in the quarter sales are made 10 Sales collected in the quarter after sales are made $65,000 75% 11 . Desired ending finished goods inventory is 12 Beginning finished goods inventory, Quarter 1 13 . Raw materials required to produce one unit 14 Desired ending inventory of raw materials is 15 16 . Raw materials inventory, beginning Raw material costs Raw materials purchases are paid and 25% 30% of the budgeted unit sales of the next quarter 12,000 5 pounds 10% of the next quarter's production needs 25,250 $0.80 per pound 60% in the quarter the purchases are made 40% in the quarter following purchase 17 18 19 Accounts payable for raw materials, beginning balance $81,500 20 21 Review Problem: Budget Schedules 22 23 Construct the sales budget 24 25 Budgeted unit sales 26 Selling price per unit 27 Total sales $420,000 28 29 Construct the schedule of expected cash collections 30 1 Year 1 Quarter Year 2 Quarter 1 2 3 1 2 60,000 $7 75,000 $7 $525,000 90,000 $7 $630,000 80,000 $7 $560,000 90,000 $7 $630,000 100,000 $7 $700,000 Year 1 Quarter 2 3 31 Accounts receivable, beginning balance $ 32 First-quarter sales 65,000 315,000 $ $ Year 65,000 33 Second-quarter sales 105,000 393,750 $ 105,000 34 Third-quarter sales 35 Fourth-quarter sales 36 Total cash collections $ 380,000 $ 498,750 $ 131,250 472,500 $ $ 603,750 $ 131,250 157,500 420,000 577,500 $ 157,500 420,000 878,750 37 38 Construct the production budget Year 1 Quarter 39 1 2 3 4 Year 1 40 Budgeted unit sales 60,000 75,000 90,000 80,000 305,000 90,000 Year 2 Quarter 2 100,000 41 Add desired finished goods inventory 22,500 27,000 24,000 24,000 27,000 30,000 42 Total needs 82,500 102,000 114,000 104,000 332,000 120,000 43 Less beginning inventory 12,000 22,500 27,000 12,000 12,000 27,000 44 Required production 70,500 79,500 87,000 92,000 320,000 93,000 45