SHOW WORK IF POSSIBLE PLEASE value: 33.34 points Requirement 2 The company has j
ID: 2554115 • Letter: S
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SHOW WORK IF POSSIBLE PLEASE
value: 33.34 points Requirement 2 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 follo wing projections in the budget: Data Year 2 Quarter Year 3 Quarter 50,000 70,000 120,000 70,000 85,000 95,000 Budgeted unit sales Selling price per unit $7 per unit 1 Chapter 7: Applying Excel Year 2 Quarter 3 Data 4 5 Budgeted unit sales Year 3 Quarter 4 70,000 50,000 70,000 120,000 85.000 95,000 Selling price per unit S8 per unit 8Accounts receivable, beginning b 9Sales collected in the quarter sales are made 10 .Sales collected in the quarter after sales are made 11Desired ending finished goods inventory is 12 Finished goods inventory, beginning 13 Raw materials required to produce one u 14Desired ending inventory of raw materials is 15.Raw materials inventory, beginning 16Raw material costs 7.Raw materials purchases are paid 18 and 9. Accounts payable for raw materials, beginning balance 20 S65,000 75% 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 $0.80 per pound 60% in the quarter the purchases are made 40% in the quarter following purchase S81,500Explanation / Answer
a.
Year 2 Quarters
Total
1
2
3
4
Budgeted unit sales
50,000
70,000
120,000
70,000
310,000
Selling price per unit
$ 7
$ 7
$ 7
$ 7
$ 7
Total sales
$ 350,000
$ 490,000
$ 840,000
$ 490,000
$ 2,170,000
Cash collection on the quarter
$ 262,500
$ 367,500
$ 630,000
$ 367,500
$ 1,627,500
Cash collection on the following quarter
$ 65,000
$ 87,500
$ 122,500
$ 210,000
$ 485,000
Total cash collection
$ 327,500
$ 455,000
$ 752,500
$ 577,500
$ 2,112,500
Expected cash collection for the year = $ 2,112,500
b.
Year 2 Quarters
Year 3 Quarters
Total (Year 2)
1
2
3
4
1
2
Budgeted unit sales
50,000
70,000
120,000
70,000
85,000
95,000
310,000
Add: Finished goods ending inventory
21,000
36,000
21,000
25,500
28,500
Less: Finished goods beginning inventory
12,000
21,000
36,000
21,000
25,500
Total required production
59,000
85,000
105,000
74,500
88,000
323,500
Total required production in the year = 323,500 units
c.
Year 2 Quarters
Year 3 Quarter
Total (Year 2)
1
2
3
4
1
Total required production
59,000
85,000
105,000
74,500
88,000
323,500
Raw materials needed per unit in pounds
5
5
5
5
5
Total raw material required for production
295,000
425,000
525,000
372,500
440,000
1,617,500
Add: raw material ending inventory
42,500
52,500
37,250
44,000
Less: raw material beginning inventory
23,000
25,500
31,500
22,350
Raw materials to be purchased in pounds
314,500
452,000
530,750
394,150
1,691,400
Cost of raw material per pound
$0.80
$0.80
$0.80
$0.80
Total cost of raw materials to be purchased
$251,600
$361,600
$424,600
$315,320
$1,353,120
Total cost of raw materials to be purchased for the year = $1,353,120
d.
Year 2 Quarters
Total (Year 2)
1
2
3
4
Total cost of raw materials to be purchased
$251,600
$361,600
$424,600
$315,320
$1,353,120
Payment released in the quarter
$150,960
$216,960
$254,760
$189,192
Payment released in the following quarter (for credit purchase)
$81,500
$100,640
$144,640
$169,840
Total expected cash disbursement for raw material
$232,460
$317,600
$399,400
$359,032
$1,308,492
Total expected cash disbursement for raw material for the year = $1,308,492
e.
Yes,
Budgeted production on 3rd quarter is 105,000 units which is more than the quarterly production capacity of the company.
Year 2 Quarters
Total
1
2
3
4
Budgeted unit sales
50,000
70,000
120,000
70,000
310,000
Selling price per unit
$ 7
$ 7
$ 7
$ 7
$ 7
Total sales
$ 350,000
$ 490,000
$ 840,000
$ 490,000
$ 2,170,000
Cash collection on the quarter
$ 262,500
$ 367,500
$ 630,000
$ 367,500
$ 1,627,500
Cash collection on the following quarter
$ 65,000
$ 87,500
$ 122,500
$ 210,000
$ 485,000
Total cash collection
$ 327,500
$ 455,000
$ 752,500
$ 577,500
$ 2,112,500
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