Fle Edit View History Bookmarks Window Help The company has just hired a new mar
ID: 2566519 • Letter: F
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Fle Edit View History Bookmarks Window Help The company has just hired a new marketing manager who insists that unit sales can be dramatically manager would lke to use he ncneased by dioing the slling price from 58 to $7. The merketing ollowing projections in the budgot 45,000 70,000 120,000 66,000 80.000 100,000 Budgeled unit sales Selling prioe per unit $7 per unt Chapter 7: Applying Excel 3 Osta 5 Budgeted unit saies 45.000 ro 000 120.000600 000 0, Seling price per unt 8 per unt 565,000 0 Seles oolected in the quarer aer sos ase made Desired andirg ished goods inventory is 12.000 ns 3 Raw matorias requned to produce one unt 4Desred ending inventory of raw matenals is s poands 10% of the net quarters producson sds 30 per pound 40% ite quate, foiowing purhase 23,000 pounds Raw materals purchases are paid Accounts paysbie for matenas, begnning baiarce81500 0 0Explanation / Answer
a.Total expected cash collections for the year = $2,002,500 Year 2 1 2 3 4 Total Budgeted units sales 45000 70000 120000 65000 300000 Selling price p.u 7 7 7 7 Budgeted sales revenues 315000 490000 840000 455000 2100000 Budgeted cash collections: 25% of previous month sales 16250 78750 122500 210000 427500 75% of current month sales 236250 367500 630000 341250 1575000 Total expected cash collections 252500 446250 752500 551250 2002500 b. Total required production for the year = 312000 units Year 2 1 2 3 4 Total 5 Sales in units 45000 70000 120000 65000 300000 80000 Add: Closing stock (30% of next quarter sales) 21000 36000 19500 24000 100500 30000 Less: Opening stock 12000 21000 36000 19500 88500 24000 Production of units 54000 85000 103500 69500 312000 86000 c. Total cost of raw material to be purchased: $ 1376000 Year 2 1 2 3 4 Total Production of units 54000 85000 103500 69500 312000 86000 Raw material required for production (1 unit = 5 pound) 270000 425000 517500 347500 1560000 430000 Add: Closing stock (10% of next quarter production) 42500 51750 34750 43000 172000 Less: Opening stock 23000 42500 51750 34750 152000 Raw material purchases in pounds 301000 467500 569250 382250 1720000 Estimated cost = 1720000 pounds * $0.8 = $1376000 d. Cash disbursements for raw materials: $1,286,280 Year 2 1 2 3 4 Total Budgeted purchases in pounds 301000 467500 569250 382250 1720000 Purchase price per pound 0.8 0.8 0.8 0.8 Budgeted purchases 240800 374000 455400 305800 1376000 Budgeted cash disbursements: 40% of previous month purchases 32600 96320 149600 182160 460680 60% of current month purchases 144480 224400 273240 183480 825600 Total expected cash disbursements 177080 320720 422840 365640 1286280 Please hit the like button if the answer helped you else leave a comment for further clarification. Thank you! All the best!
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