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: Year 2 Quarter Year 3 Quarter 2 Data 2 1 Budgeted unit sales Selling price per unit 65,000 45,000 70,000 105,000 80,000 90,000 $7 A B C D E G Chapter 8: Applying Excel Data Year 3 Quarter 1 2 3 4 1 2 70,000 105,000 90,000 Budgeted unit sales 45,000 65,000 80,000 S Selling price per unit 7 per unit S 65,000 Accounts receivable, beginning balance 75% Sales collected in the quarter sales are made 25% Sales collected in the quarter after sales are made Desired ending finished goods inventory is 30% of the budgeted unit sales of the next quarter 12.000 units Finished goods inventory, beginning Raw materials required to produce one unit 5 pounds 10%of the next quarter's production needs Desired ending inventory of raw materials is Raw materials inventory, beginning 23,000 pounds Raw material costs 0.80 per pound S Raw materials purchases are paid 60% in the quarter the purchases are made 40% in the quarter following purchase and Accounts payable for raw materials, beginning balance 81,500 a. What are the total expected cash collections for the year under this revised budget? $ 2,007,500 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 A1 Jx Chapter 8: Applying Excel A B D F G H J k Chapter 8: Applying Excel 3 Data Year 2 Quarter 2. Year 3 Quarter 1 4 5 Budgeted unit sales 40,000 60,000 100,000 50,000 80,000 70,000 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 11Desired 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 17Raw materials purchases are paid $8 per unit $65,000 75% 25% 30% of the budgeted unit sales 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 18 and Accounts payable for raw materials, beginning balance 21 Enter a fomula into each of the cells marked with a? below 22 Review Problem: Budget Schedules K J H G F E D C B 21 Enter a formula into each of the cells marked with a ? below 22 Review Problem: Budget Schedules 23 Year 3 Quarter Year 2 Quarter 24 Construct the sales budget 2 2 1 25 26 Budgeted unit sales 27 Selling price per unit 28 Total sales 7 29 Year 2 Quarter 30 Construct the schedule of expected cash collections Year 4 3 1 31 32 Accounts receivable, beginning balance 33 First-quarter sales 34 Second-quarter sales ? ? 36 Fourth-quarter sales 37 Total cash collections 7 Year 3 Quarter 38 Year 2 Quarter 39 Construct the production budget 2 1 Year 2 1 7 40 41 Budgeted unit sales 42 Add desired finished goods inventory 43 Total needs 44 Less beginning inventory 45 Required production ? 2. 2 2 2 2 46 J H G F E D B A 46 Year 3 Quarter Year 2 Quarter 47 Construct the raw materials purchases budget Year 1 4 2 1 48 7 49 Required production (units) 50 Raw materials required to produce one unit 51 Production needs (pounds) 52 Add desired ending inventory of raw materials (pounds) 53 Total needs (pounds) 54 Less beginning inventory of raw materials (pounds) 55 Raw materials to be purchased 56 Cost of raw materials per pound 57 Cost of raw materials to be purchased 2 ? 2 2 7 2 2 2 ? 58 Year 2 Quarter expected cash payments 59 Construct the schedule 4 Year 2 1 60 61 Accounts payable, beginning balance 62 First-quarter purchases 63 Second-quarter purchases 64 Third-quarter purchases 65 Fourth-quarter purchases ? 2 2 ? Total cash disbursements 66 67 68 69