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: Data Budgeted unit sales Selling price per unit Year 2 Quarter 2. 3 65,000 115,000 Year 3 Quarter 1 2 90,000 90,000 50,000 $7 75,000 B D E F G Chapter 8: Applying Excel 1 2. 3 4 Data 1 50,000 2 65,000 3 115,000 Year 3 Quarter 4 1 75,000 90,000 2 90,000 5 Budgeted unit sales 6 7 $ 7 per unit 65,000 8 $ 9 10 75% 25% 30% of the budgeted unit sales of the next quarter 12,000 units 11 12 13 . 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 and Accounts payable for raw materials, beginning balance 14 15 16 $ 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 17 18 19 $ a. What are the total expected cash collections for the year under this revised budget? 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 e. After seeing this revised budget, the production manager cautioned that due to the current production constraint, a complex milling machine, the plant can produce no more than 90,000 units in any one quarter. Is this a potential problem? Yes