Question

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 following projections in the budget Year 2 Quarter Data Budgeted unit sales Selling price per unit 50.000 65.000 120.000 70,000 80,000 90.000 C D E F G 1 Chapter 8: Applying Excel Year 3 Quarter Data 50 000 5 65 000 70.000 Budgeted unit sales 120.000 90000 80.000 . Selling price per unit Accounts receivable beginning balance 8 - Sales collected in the quarter sales are made 10 . Sales collected in the quarter after sales are made - Desired onding finished goods inventory is 7 per unit 65 000 75% 25% 30% of the budgeted unit sales of the next quarters 12.000 units 5 pounds 10% of the next quarter's production needs 23,000 pounds 0 80 per pound 12 13 14 15 16 . Finished goods inventory beginning . Raw materials required to produce one unit . Desired onding inventory of raw materials is - Raw materials inventory beginning Raw material costs

I'm having trouble solving this accounting problem and would greatly appreciate some help please!

Answer 1

Solution a:

Schedule of expected cash collection
Particulars	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Accounts receivables beginning	$65,000.00				$65,000.00
Cash received for Q1 Sale	$262,500.00	$87,500.00			$350,000.00
Cash received for Q2 Sale		$341,250.00	$113,750.00		$455,000.00
Cash received for Q3 Sale			$630,000.00	$210,000.00	$840,000.00
Cash received for Q4 Sale				$367,500.00	$367,500.00
Budgeted Cash Collection	$327,500.00	$428,750.00	$743,750.00	$577,500.00	$2,077,500.00

Solution b:

Production Budget
Particulars	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year	Quarter 1, next year
Budgeted sales unit	50000	65000	120000	70000	305000	80000
Add: ending inventory (30% of next quarter sales)	19500	36000	21000	24000	24000	27000
Less: Beginning inventory	12000	19500	36000	21000	12000	24000
Estimated production unit	57500	81500	105000	73000	317000	83000

solution c:

Budgeted Cost of raw material purchases
Particulars	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Budgeted Production units	57500	81500	105000	73000	317000
Raw material per unit (In Pounds)	5	5	5	5	5
Total requirement of raw materials	287500	407500	525000	365000	1585000
Add: Desired ending inventory (10% of next quarter production needs)	40750	52500	36500	41500	41500
Less: Beginning inventory	23000	40750	52500	36500	23000
Budgeted purchase units of raw material (In Pounds)	305250	419250	509000	370000	1603500
Raw material cost per pound	$0.80	$0.80	$0.80	$0.80	$0.80
Budgeted cost of purchases	$244,200.00	$335,400.00	$407,200.00	$296,000.00	$1,282,800.00

Solution d:

Schedule of expected cash disbursement for merchandise purchases
Particulars	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Accounts Payable, Beginning	$81,500.00				$81,500.00
Q1 Purchases	$146,520.00	$97,680.00			$244,200.00
Q2 Purchases		$201,240.00	$134,160.00		$335,400.00
Q3 Purchases			$244,320.00	$162,880.00	$407,200.00
Q4 Purchases				$177,600.00	$177,600.00
Total payments	$228,020.00	$298,920.00	$378,480.00	$340,480.00	$1,245,900.00