NEED HELP WITH PART 2 I HAVE INCLUDED PART 1 AT THE BOTTOM WHEN THAT INFORMATION IS NEEDED! WILL RATE You now have the information you need to create a budget that will allow you to show the banker your plans for the coming year. This budget also will help you to understand your sales and the collection on those sales. You will be able to determine how much money you need to purchase the ingredients for your dessert pizzas and to pay your manufacturing overhead and operating (S\&A) expenses. You realize, "It all begins with sales. If I can estimate how many dessert pizzas I can sell, then I can calculate how many ingredients to buy and how much my overhead and operating expenses will be. Well, I had better get that sales number as accurate as possible." Requirements for Part 2: Exhibit 2 presents information regarding your sales projections, expected collection patterns, purchasing and payment patterns for the first four months of the year. For each of the budgets you prepare in Part 2, present data by month (i.e., 3 columns presenting 3 months simimilar to Ch7 notes in which we used 4 columns to present 4 quarters of budget data). Use Excel to prepare the following operating budgets: Sales budget/Cash collections Budget for 1st quarter Direct materials purchases budget/Cash disbursements budget for 1st gutr One DM budget PER ingredient Manufacturing overhead budget for 1st quarter Operating (S\&A) expenses budget for 1st quarter Note: Do not complete the income statements, cash budget, and balance sheet. These budgets comprise Part 3 of the project that will be completed later. For Parts 2: Answers must be computed in Excel using formulas EXHIBIT 2 Sales Projections, Collections, Purchases and Payments Monthly sales projections: Currently you sell 600 dessert pizzas per month. Your market research suggests that with an expanded operation you will sell 2,400 dessert pizzas per month (same as stated in Part 1). You have stopped production of dessert pizzas at year end to facilitate the expansion of the business. Therefore, you expect to have no uncollected accounts receivable, no unpaid accounts payable, and no raw material inventories at January 1, 2018, the beginning of your budget period. Cash Receipts for Sales: All sales are made on account. Cash collections for accounts receivable are as follows: Received in the month of sale Received in the month following the sale 75 percent Production: The company produces the dessert pizzas daily. No work-in-process or finished goods inventories are maintained. Raw materials: The company plans to maintain an ending inventory of raw materials at the end of each month. The company desires to maintain a percentage of raw materials production needs for the next month. See Exhibit 1 (from Project Part 1) for information regarding raw material costs, manufacturing overhead, and operating (S\&A) expense. A. Direct Materials /2 dessert pizzas \begin{tabular}{|l|r|} \hline Flour & 0.2 \\ \hline Brown Sugar & 0.1 \\ \hline Butter & 0.5 \\ \hline Total & 0.8 \\ \hline \end{tabular} Variable Manufacturing OH : E. Fixed Expenses: NEED HELP WITH PART 2 I HAVE INCLUDED PART 1 AT THE BOTTOM WHEN THAT INFORMATION IS NEEDED! WILL RATE You now have the information you need to create a budget that will allow you to show the banker your plans for the coming year. This budget also will help you to understand your sales and the collection on those sales. You will be able to determine how much money you need to purchase the ingredients for your dessert pizzas and to pay your manufacturing overhead and operating (S\&A) expenses. You realize, "It all begins with sales. If I can estimate how many dessert pizzas I can sell, then I can calculate how many ingredients to buy and how much my overhead and operating expenses will be. Well, I had better get that sales number as accurate as possible." Requirements for Part 2: Exhibit 2 presents information regarding your sales projections, expected collection patterns, purchasing and payment patterns for the first four months of the year. For each of the budgets you prepare in Part 2, present data by month (i.e., 3 columns presenting 3 months simimilar to Ch7 notes in which we used 4 columns to present 4 quarters of budget data). Use Excel to prepare the following operating budgets: Sales budget/Cash collections Budget for 1st quarter Direct materials purchases budget/Cash disbursements budget for 1st gutr One DM budget PER ingredient Manufacturing overhead budget for 1st quarter Operating (S\&A) expenses budget for 1st quarter Note: Do not complete the income statements, cash budget, and balance sheet. These budgets comprise Part 3 of the project that will be completed later. For Parts 2: Answers must be computed in Excel using formulas EXHIBIT 2 Sales Projections, Collections, Purchases and Payments Monthly sales projections: Currently you sell 600 dessert pizzas per month. Your market research suggests that with an expanded operation you will sell 2,400 dessert pizzas per month (same as stated in Part 1). You have stopped production of dessert pizzas at year end to facilitate the expansion of the business. Therefore, you expect to have no uncollected accounts receivable, no unpaid accounts payable, and no raw material inventories at January 1, 2018, the beginning of your budget period. Cash Receipts for Sales: All sales are made on account. Cash collections for accounts receivable are as follows: Received in the month of sale Received in the month following the sale 75 percent Production: The company produces the dessert pizzas daily. No work-in-process or finished goods inventories are maintained. Raw materials: The company plans to maintain an ending inventory of raw materials at the end of each month. The company desires to maintain a percentage of raw materials production needs for the next month. See Exhibit 1 (from Project Part 1) for information regarding raw material costs, manufacturing overhead, and operating (S\&A) expense. A. Direct Materials /2 dessert pizzas \begin{tabular}{|l|r|} \hline Flour & 0.2 \\ \hline Brown Sugar & 0.1 \\ \hline Butter & 0.5 \\ \hline Total & 0.8 \\ \hline \end{tabular} Variable Manufacturing OH : E. Fixed Expenses