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What are the total expected cash collections for the year under this revised budget?

What is the total required production for the year under this revised budget?

What is the total cost of raw materials to be purchased for the year under this revised budget?

What are the total expected cash disbursements for raw materials for the year under this revised budget?

After seeing this revised budget, the production manager cautioned that due to the limited availability of a complex milling machine, the plant can produce no more than 90,000 units in any one quarter. Is this a potential problem?

The company just hired a new marketing manager who insists 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		Year 3 Quarter
Data	1	2	3	4		1	2
Budgeted unit sales	45,000	70,000	120,000	75,000		85,000	90,000
Selling price per unit	$7

\begin{tabular}{|c|c|c|c|c|c|c|c|c|} \hline & A & & B & C & D & E & F & G \\ \hline 1 & Chapter 8: Applying Excel & & & & & & & \\ \hline \multicolumn{9}{|l|}{2} \\ \hline 3 & Data & & & & & & \multicolumn{2}{|l|}{ Year 3 Quarter } \\ \hline 4 & & & 1 & 2 & 3 & 4 & 1 & 2 \\ \hline 5 & Budgeted unit sales & & 45,000 & 70,000 & 120,000 & 75,000 & 85,000 & 90,000 \\ \hline 6 & & & & & & & & \\ \hline 7 & - Selling price per unit & $ & 7 & per unit & & & & \\ \hline 8 & - Accounts receivable, beginning balance & $ & 65,000 & & & & & \\ \hline 9 & - Sales collected in the quarter sales are made & & 75% & & & & & \\ \hline 10 & - Sales collected in the quarter after sales are made & & 25% & & & & & \\ \hline 11 & - Desired ending finished goods inventory is & & 30% & \multicolumn{5}{|c|}{ of the budgeted unit sales of the next quarter } \\ \hline 12 & - Finished goods inventory, beginning & & 12,000 & units & & & & \\ \hline 13 & - Raw materials required to produce one unit & & 5 & pounds & & & & \\ \hline 14 & - Desired ending inventory of raw materials is & & 10% & \multicolumn{5}{|c|}{ of the next quarter's production needs } \\ \hline 15 & - Raw materials inventory, beginning & & 23,000 & pounds & & & & \\ \hline 16 & - Raw material costs & $ & 0.80 & per pound & & & & \\ \hline 17 & - Raw materials purchases are paid & & 60% & \multicolumn{5}{|c|}{ in the quarter the purchases are made } \\ \hline 18 & and & & 40% & \multicolumn{5}{|c|}{ in the quarter following purchase } \\ \hline 19 & - Accounts payable for raw materials, beginning balance & $ & 81,500 & & & & & \\ \hline \end{tabular} Chapter 8: Applying Excel Data Budgeted unit sales - Selling price per unit - Accounts receivable, beginning balance - Sales collected in the quarter sales are made - Sales collected in the quarter after sales are made - Desired ending finished goods inventory is - Finished goods inventory, beginning - Raw materials required to produce one unit - Desired ending inventory of raw materials is - Raw materials inventory, beginning - Raw material costs - Raw materials purchases are paid and - Accounts payable for raw materials, beginning balance Year 2 Quarter Year 3 Quarter 2 40,000 60,000 3 $8 per unit $65,000 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 $81,500 Enter a formula into each of the cells marked with a ? below Review Problem: Budget Schedules Construct the sales budget Budgeted unit sales Selling price per unit Total sales Construct the schedule of expected cash collections Accounts receivable, beginning balance First-quarter sales Second-quarter sales Third-quarter sales Fourth-quarter sales Total cash collections Construct the production budget Budgeted unit sales Add desired finished goods inventory Total needs Less beginning inventory Required production Construct the raw materials purchases budget Required production (units) Raw materials required to produce one unit Production needs (pounds) Add desired ending inventory of raw materials (pounds) Total needs (pounds) Less beginning inventory of raw materials (pounds) Raw materials to be purchased Cost of raw materials per pound Cost of raw materials to be purchased Construct the schedule of expected cash payments Accounts payable, beginning balance First-quarter purchases Second-quarter purchases Third-quarter purchases Fourth-quarter purchases Total cash disbursements \begin{tabular}{|c|c|c|c|c|c|c|c|c|} \hline & A & & B & C & D & E & F & G \\ \hline 1 & Chapter 8: Applying Excel & & & & & & & \\ \hline \multicolumn{9}{|l|}{2} \\ \hline 3 & Data & & & & & & \multicolumn{2}{|l|}{ Year 3 Quarter } \\ \hline 4 & & & 1 & 2 & 3 & 4 & 1 & 2 \\ \hline 5 & Budgeted unit sales & & 45,000 & 70,000 & 120,000 & 75,000 & 85,000 & 90,000 \\ \hline 6 & & & & & & & & \\ \hline 7 & - Selling price per unit & $ & 7 & per unit & & & & \\ \hline 8 & - Accounts receivable, beginning balance & $ & 65,000 & & & & & \\ \hline 9 & - Sales collected in the quarter sales are made & & 75% & & & & & \\ \hline 10 & - Sales collected in the quarter after sales are made & & 25% & & & & & \\ \hline 11 & - Desired ending finished goods inventory is & & 30% & \multicolumn{5}{|c|}{ of the budgeted unit sales of the next quarter } \\ \hline 12 & - Finished goods inventory, beginning & & 12,000 & units & & & & \\ \hline 13 & - Raw materials required to produce one unit & & 5 & pounds & & & & \\ \hline 14 & - Desired ending inventory of raw materials is & & 10% & \multicolumn{5}{|c|}{ of the next quarter's production needs } \\ \hline 15 & - Raw materials inventory, beginning & & 23,000 & pounds & & & & \\ \hline 16 & - Raw material costs & $ & 0.80 & per pound & & & & \\ \hline 17 & - Raw materials purchases are paid & & 60% & \multicolumn{5}{|c|}{ in the quarter the purchases are made } \\ \hline 18 & and & & 40% & \multicolumn{5}{|c|}{ in the quarter following purchase } \\ \hline 19 & - Accounts payable for raw materials, beginning balance & $ & 81,500 & & & & & \\ \hline \end{tabular} Chapter 8: Applying Excel Data Budgeted unit sales - Selling price per unit - Accounts receivable, beginning balance - Sales collected in the quarter sales are made - Sales collected in the quarter after sales are made - Desired ending finished goods inventory is - Finished goods inventory, beginning - Raw materials required to produce one unit - Desired ending inventory of raw materials is - Raw materials inventory, beginning - Raw material costs - Raw materials purchases are paid and - Accounts payable for raw materials, beginning balance Year 2 Quarter Year 3 Quarter 2 40,000 60,000 3 $8 per unit $65,000 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 $81,500 Enter a formula into each of the cells marked with a ? below Review Problem: Budget Schedules Construct the sales budget Budgeted unit sales Selling price per unit Total sales Construct the schedule of expected cash collections Accounts receivable, beginning balance First-quarter sales Second-quarter sales Third-quarter sales Fourth-quarter sales Total cash collections Construct the production budget Budgeted unit sales Add desired finished goods inventory Total needs Less beginning inventory Required production Construct the raw materials purchases budget Required production (units) Raw materials required to produce one unit Production needs (pounds) Add desired ending inventory of raw materials (pounds) Total needs (pounds) Less beginning inventory of raw materials (pounds) Raw materials to be purchased Cost of raw materials per pound Cost of raw materials to be purchased Construct the schedule of expected cash payments Accounts payable, beginning balance First-quarter purchases Second-quarter purchases Third-quarter purchases Fourth-quarter purchases Total cash disbursements

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