Show me your works!!!

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	Year 2 Quarter				Year 3 Quarter
	1	2	3	4	1	2
Budgeted unit sales	50,000	65,000	115,000	60,000	90,000	100,000
Selling price per unit	$7	per unit
Bugeted Unit sales : Year 2 Quarter 1= 50,000 2= 65,000 3= 115,000 4= 60,000 Year 3 Quarter 1= 90,000 2= 100,000 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 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 on 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 cost $0.80 per pound

Raw materials purchases are paid 60% in the quarter the purchases are made and 40 % in the quarter following purchase

Accounts payable for raw materials, beginning balance $81,500

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 80,000 units in any one quarter. Is this a potential problem?

	Yes
	No