Requirement 1: Complete the following Master Budget in excel using forumlas to populate the unknown (? cells from the data provided below. Then move on to Requirement 2 below Data Budgeted unit sales Year 2 Quarter Year 3 Quarter 3 2 80,000 40,000 60,000 00,000 50,000 70,000 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 S8 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 Accounts payable for raw materials, beginning balance $81,500 Enter a formula into each of the cells marked with a ? below Review Problem: Budget Schedules Construct the sales budget Year 2 Quarter Year 3 Quarter Budgeted unit sales Selling price per unit Total sales Construct the production budget Year 2 Quarter Year 3 Quarter 3 Year 2 Budgeted unit sales Add desired finished goods inventory Total needs Less beginning inventory Required production Construct the raw materials purchases budget Year 2 Quarter Year 3 Quarter 3 Year 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 materals per pound Cost of raw materials to be purchased Requirement 2: Copy your work from Requirement 1 into a new excel worksheet to adjust your budget to answer the following questions. 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: Year 2 Quarter Year 3 Quarter Budgeted unit sales 50,000 70,000 120,000 80,000 90,000 100,000 $7 Selling price per unit What are the total expected cash collections for the year under this revised budget? What is the total required production for the year under this revised budget? What is the total cost of raw materials to be purchased for the year under this revised budget? What are the total expected cash disbursements for raw materials for the year under this revised budget? After seeing this revised budget, the production manager cautioned that due to the limited availability of a complex milling machine, the plant can produce no more than 90,000 units in any one quarter. Is this a potential problem? If so, what can be done about it
