Data 1 2 3 4 1 2

Budgeted unit sales 50,000 65,000 110,000 65,000 80,000 95,000

Selling price per unit $7 per unit

Year 2 Year 3

1 2 3 4 1 2

Budget Unit Sales 50,000 65,000 110,000 65,000 80,000 95,000

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 good inventory is 30% of the budgeted unit sales of the next quarter

Finished goods inventory, beginning $12,000

Raw materials required to produce one unit 5 pounds

Desired ending inventory of the raw material is 10% of the next quarters production needs

Raw material inventory, beginning 23,000 pounds

Raw material costs 0.80 per bound

Raw materials purchases are paid 60% in the quarter the purchase are made

Accounts payable for raw material, beginning balance$ 81,500

1. What are the total expected cash collections for the year under this revised budget? 2. What is the total required production for the year under this revised budget? 3. What is the total cost of raw materials to be purchased for the year under this revised budget?

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

5.

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 80,000 units in any one quarter. Is this a potential problem?

Yes or No ?

* Please provide answers with excel formulas