NELMA Company manufactures chairs made of PVC plastic material. Budgeted sales are 10,000 chairs for June 20,000 chairs for July 40,000 chairs for August 45,000 chairs for September 55,000 chairs for October 65,000 chairs for November Cash is collected from customers in the following manner: Month of sale: 30%; Month following the sale: 70%. Average selling price is expected to be $100 per chair. Production Budget has been prepared as follows: Production Budget Month July August Sep. Total Budgeted Sales (units) 20,000 40,000 45,000 105,000 55,000 Ending Inventory 4,000 4,500 5,500 5,500 Total needs 24,000 44,500 50,500 118,000 Beginning inventory 1,000 4,000 4,500 1,000 Expected Production (Units) 23,000 40,500 46,000 109,500 Each chair requires 10 feet of the PVC material. The material costs $2 per feet. Ending materials inventories are budgeted at 10% of the current month's production requirements. 6,000 feet of PVC material were on hand at the beginning of July. Required: a. Prepare a schedule showing purchase requirements for PVC raw materials for each of the months of July, August and September. (8 Marks) b. Prepare a Schedule of Cash Collections for each of the months of July, August & September. (6 Marks) c. "The fast pace of technological change and the complexities of global competition make developing effective budgets both more difficult and more important". Discuss. (6 Marks) . 2605 words English (United Kingdom) Select Format Painter Clipboard Font Editing Paragraph Styles b. Prepare a Schedule of Cash Collections for each of the months of July, August & September. (5 Marks) c. "The fast pace of technological change and the complexities of global competition make developing effective budgets both more difficult and more important". Discuss. (6 Marks) a. Raw Material Purchase Budget Month August Sep. July Total Expected Production Unit Requirements of Raw Materials Total Requirements Ending Inventory Beginning Inventory Raw materials to be purchased unit cost of raw materials Total Purchases ($) July Month August Sep. Total b. Schedule of Cash Collections Accounts receivable, beg. Balance first month sales second month sales third month sales Total cash collections