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 Data 1 2 Year 3 Quarter 1 2 Budgeted unit sales 45,000 65,000 105,000 60,000 80,000 95,000 Selling price per unit $7 1 Chapter 8: Applying Excel A B E F G 2 3 Data 4 5 Budgeted unit sales 1 2 3 4 45,000 65,000 105,000 60,000 6 7 Selling price per unit 8 Accounts receivable, beginning balance 9 Sales collected in the quarter sales are made $ 7 per unit $ 65,000 75% Sales collected in the quarter after sales are made 10 Desired ending finished goods inventory is 11 Finished goods inventory, beginning 12 Raw materials required to produce one unit 13 Desired ending inventory of raw materials is 14 Raw materials inventory, beginning 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 15 Raw material costs $ 0.80 per pound 16 Raw materials purchases are paid 60% in the quarter the purchases are made 17 and 40% in the quarter following purchase 18 Accounts payable for raw materials, beginning balance $ 81,500 19 Year 3 Quarter 1 2 80,000 95,000 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? No Yes