WILLIAM COMPANY BUDGETS 2 William Company creates a sales budget for the first six months of 2022. 3 March80,000 units: April 20,000 units: May 60,000 unit The price that William charges is $50 per unit. 25 26 Production budget 27 20 Unit Sales Price Sales Revenue 29 30 31 8Sales Budget 9 10 11 32 13 Willam constructs a cash collections budget. The typical collection history indicates that cash is collected 34 60% in the month of sale and 40% is collected in the following month. Note: the sales in December were $1,800,000 15 16 Cash Collections Budget 17 18 Sales Revenue Collect 60% in month Collect 40% next month Total Cash Collections 49 Unit Sales Desired Ending Inventory Subtotal eginning inventory Units to Produce and June 50,000 units. Create a sales budget. 32 33 Note that the production budget consists of units only, no dollars 34 Units to Produce Dired Material PerUnit Material Reg for Prod Desired End Total Materials Required Beginning Dived M Pounds of Mts to Parch Cost Per Found Dived Materials to Purch 50 51 52 Note: I have bol faced a few items for darity. 53 54 55 54 720.000 $720.000 20 50 $0 21 22 William prepares a production budget to determine how many units of product need to be manufactured each month 23 William wishes to finish each month with enough ending inventory to cover 30% of the following month's sales. Note: the beginning 24wentory in January is 12,000 units, and the antidpated sales in July will be 40,000 units Jan 0 12,000 12,000 Feb Expected sales for January-40,000 units; February-60,000 uni Jan 0 0 0 14,400 50 Jan Feb Mar Apr May $2,000,000 $1,000,000 $4,000,000 $3.500,000 $1.000.000 14.00 50 35 Willam prepares a Direct Materials Buget 36fach unit of product in the Production budget requires 2 pounds of direct materials at a cost of $4.00 per pund 37 Willem wants to finish each march with 20% of the next month's direct material requirement on hand 38 Beginning inventory of materials in Jamery is 20% of $2,000 pounds required in July Direct Materials Feb Mar 0 0 0 50 Feb 0 0 0 of 0 $4.00 50 Mar 0 0 O Apr $0 Ma 0 0 0 0 0 $4.00 500 Apr 0 0 May $0 Apr 0 of 0 0 0 $4.00 50 Assume that 50,000 pounds of material will be 50 May 0 0 0 May 0 of 9 O 0 $4.00 10 Jun 50 Jun $2.500,000 50 lun 0 0 0 Jun 10,000 10,000 D 10,000 $4.00 $40,000 Total 50 July 40,000 $ July 10,000 JFMAMI 199 DIMAM CORE EG lafe H CCM SIMAME DE E **