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Tracy is preparing her budget for next year and needs your assistance. Now that she has a better idea of what to expect now that

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Tracy is preparing her budget for next year and needs your assistance. Now that she has a better idea of what to expect now that she is in business full time, we wants to begin having some of her ingredients in stock to avoid not being able to get the ingredients on time. She is ready to prepare her budget for the first four months of 2021. She believes she will sell the following number of cupcakes each month: Month January February March April # of cupcakes 7000 8000 7100 7500 All cupcakes are sold each month and she has no beginning or ending cupcake inventory. Tracy would like for you to create a cash collections budget if she sells each cupcake for $2.50 each. She anticipates that 75% of her sales will be cash sales and the remaining 25% will be on account. Of the 25% on account, she believes she will receive 60% the month of sales and 40% the second month. The beginning accounts receivable is $2,000. Lastly, she would like for you to create a direct materials budget. She would like to keep 15% of her ingredients in beginning materials inventory. Each cupcake uses 4 oz. of material and the cost per ounce is $0.10. Her inventory on January 1 is 3,000 oz. and her presumed ending inventory on April 30th is 3,350 oz. She pays for all materials in the month of purchase Tracy needs to know what her expected cash received each month and how much she cash disbursements will be for materials. Hint: Create a Sale and Cash Collection Budget and a Direct Materials Budget to include cash disbursements. Because she sells all cupcakes produced each month her sales numbers and production numbers are the same (You do not need to create a production budget). Prepare a one page paper where you give Tracy the requested budgets and explain how you determined the amounts. Remember: Write the paper to Tracy as a business document

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