Chapter $8$: Applying Excel: Exercise $($Part $2$ of $2)$

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

Year $3$ Quarter

Data $123412$

Budgeted unit sales $45,00065,000115,00070,00080,000100,000$

Selling price per unit $$7$a$.$ What are the total expected cash collections for the year under this revised budget?

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

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

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

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

multiple choice

Yes

No$\backslash$table$[[$Chapter $8$: Applying Excel$],[$Data$,,,,,,$Year $3$ Quarter$],[,1,2,3,4,1,2],[$Budgeted unit sales,,$45,000,65,000,115,000,70,000,80,000,100,01],[-$ Selling price per unit,$$,7,$per unit,,,,$],[-$ Accounts receivable, beginning balance,$$,65,000,,,,,],[-$ Sales collected in the quarter sales are made,,$75\%,,,,,],[-$ Sales collected in the quarter after sales are made,,$25\%,,,,,],[-$ Desired ending finished goods inventory is$,,30\%,$of the budgeted unit sales of the next quarter$],[-$ Finished goods inventory, beginning,,$12,000,$units,,,,$],[-$ Raw materials required to produce one unit,,$5,$pounds,,,,$],[-$ Desired ending inventory of raw materials is$,,10\%,$of the next quarter's production needs$],[-$ Raw materials inventory, beginning,,$23,000,$pounds,,,,$],[-$ Raw material costs,$$,0\mathrm{.}80,$per pound,,,,$],[-$ Raw materials purchases are paid,,$60\%,$in the quarter the purchases are made$],[$and$,,40\%,$in the quarter following purchase$],[-$ Accounts payable for raw materials, beginr,$$,81,500,,,,,]]$