Requirement 2: The company hasjust hired a new marketing manager who insists that unit sales can be dramatically increased by dropping the selling price from $8 to $1 The marketing manager would like to use the following projections in the budget: Year 2 Quarter Year 3 Quarter Data 1 2 3 4 1 2 Budgeted unit sales 50,000 70,000 115,000 70,000 85,000 95,000 Selling price per unit $7 A B C D E F G 1 Chapter 8: Applying Excel 2 3 Data Year 3 Quarter 4 1 2 3 4 1 2 5 Budgeted unit sales 50,000 ?0,000 115,000 70,000 85,000 95,000 6 7 - Selling price per unit $ 7 per unit 8 - Accounts receivable, beginning balance $ 65,000 9 - Sales collected in the quarter sales are made 75% 10 - Sales collected in the quarter alter sales are made 25% ll - Desired ending nished goods inventory is 30% ofthe budgeted unit sales ofthe next quarter 12 - Finished goods inventory, beginning 12,000 units 13 - Raw materials required to produce one unit 5 pounds 14 - Desired ending inventory of raw materials is 10% ofthe next quartefs production needs 15 - Raw materials inventory, beginning 23,000 pounds 16 - Raw material costs $ 0.80 per pound l 17 - Raw materials purchases are paid 60% in the quarterthe purchases are made 18 and 40% in the quarter following purchase 19 - Accounts payable for raw materials, beginning balance $ 81,500 I a. Wh at are the total expected cash collections for the year under this revised budget? b. What is the total required production for the year under this revised budget? c. What is the total cost of raw materials to be purchased for the year under this revised budget? d. What are the total expected cash disbursements for raw materials for the year under this revised budget? 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? 0 Yes D No A B C E F G H I Chapter 8: Applying Excel Datz Budgeted unit sales 40,000 60,000 100,000 50,000 70,000 80,000 - Selling price per unit $8 per unit Accounts receivable, beginning balance $65,000 . Sales collected in the quarter sales are made 75% - Sales collected in the quarter after sales are made 25% Desired ending finished goods inventory is 30% of the budgeted unit sales of the next quarter - Finished goods inventory, beginning 12,000 units - Raw materials required to produce one unit 5 pounds - Desired ending inventory of raw materials is 10% of the next quarter's production needs - Raw materials inventory, beginning 23,000 pounds - Raw material costs 10.80 per pound Raw materials purchases are paid 60% in the quarter the purchases are made and 40% in the quarter following purchase to payable for raw materials, beginning baland $81,500 Enter s formwis into each of the calls marked with a Fewem Review Problem: Budget Schedules Construct the sales braget F Budgeted unit sales Selling price per unit 18 Total sales Construct the schedule of expected cast c 4 Accounts receivable, beginning balance First-quarter sales Second-quarter sales 35 Third-quarter sales 36 Fourth-quarter sales 17 Total cash collections 38 39 Construct the production brager 4 41 Budgeted unit sales Add desired finished goods inventory 13 Total needs 14 Less beginning inventory 45 Required production Cosstreet de raw materials percloses bra 4 Year Required production [ unitel Raw materials required to produce one unit Production needs ( pounds) Add desired ending inventory of raw materials [ pound 13 Total needs [ poundel 04 Less beginning inventory of raw materials ( pounds) 15 Raw materials to be purchased 16 Cost of raw materials per pound Cost of raw materials to be purchased 19 Construct the schedule of expected cast g F Accounts payable, beginning balance First-quarter purchases Second-quarter purchases Third-quarter purchase: i Fourth-quarter purchases Total cash disbursements