Budgeting:

Data Year 2 year 3

Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter2

Budgeted unit sales 50,000 , 75,000, 35,000, 90,000 55,000 85,000

Selling price per unit $20

Accounts receivable, beginning balance $95,000

Sales collected in the quarter sales are made 70%

Sales collected in the quarter after sales are made 30%

Desired ending finished goods inventory is 35% of the budgeted unit sales of the next quarter

Finished goods inventory, beginning.........8,000 units

Raw materials required to produce one unit ---------3 pounds

Desired ending inventory of raw materials is 40% of the next quarter's production needs

Raw materials inventory, beginning 25,000 pounds

Raw material costs $1.25 per pound

Raw materials purchases are paid 80% in the quarter the purchases are made and 20% in the quarter following purchase

Accounts payable for raw materials, beginning balance- $65,000

Note: please find Sales Budget, Production Budget, Raw Materials Purchases Budget, Schedule of Expected Cash Disbursements