A. What are the total expected cash collections for the year under 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? rement 2:ompany has just hired a new marketing manager who insists that unit sales can be dramatically increased by dropping the sellingfrom $8 to $7. The marketing manager would like to use the following projections in the budget:2 of 2Year 2 QuarterYear 3 Quarter1242geted unit salesling price per unit45,000$770,000120,00075,00085,00095,000eBookABCEPrintChapter 8: Applying ExceleferencesDataYear 3 Quarter141Budgeted unit sales45,00070,000120,00075,00085,00095,000AcGrawHill< Prevof 3Next >...... ....*RE11:17 PMDELLear3/10/2022 Selling price per unit7 per unitAccounts receivable, beginning balance65,000• Sales collected in the quarter sales are made75%Sales collected in the quarter after sales are made25%• Desired ending finished goods inventory is30% of the budgeted unit sales of the next quarterFinished goods inventory, beginning12,000 unitsRaw materials required to produce one unit5 poundsokDesired ending inventory of raw materials is10% of the next quarter's production needsnt• Raw materials inventory, beginning23,000 pounds• Raw material costs0.80 per poundnces• Raw materials purchases are paid60% in the quarter the purchases are madeand40% in the quarter following purchaseAccounts payable for raw materials, beginning balance81,500< Prevof 3Next >..%24%24%24%24

Budget: A budget is an estimation to determine the income that will be earned and expenses that will…

A. What are the total expected cash collections for the year under 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?

A. What are the total expected cash collections for the year under 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?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Cash budget

A cash budget is an estimate of an organization's cash flow for the future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future. If cash receipts are insufficient to cover future expenses, an organization may plan to obtain funds from other sources. After estimating the sales, purchase, and capital expenditure budgets for the year, management develops a cash budget. These budgets are created to ensure that an organization's cash flow is managed. It is important to note that only cash transactions are recorded when actual cash enters and exits an organization.

Question

A. What are the total expected cash collections for the year under 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?

rement 2:
ompany has just hired a new marketing manager who insists that unit sales can be dramatically increased by dropping the selling
from $8 to $7. The marketing manager would like to use the following projections in the budget:
2 of 2
Year 2 Quarter
Year 3 Quarter
1
2
4
2
geted unit sales
ling price per unit
45,000
$7
70,000
120,000
75,000
85,000
95,000
eBook
A
B
C
E
Print
Chapter 8: Applying Excel
eferences
Data
Year 3 Quarter
1
4
1
Budgeted unit sales
45,000
70,000
120,000
75,000
85,000
95,000
Ac
Graw
Hill
< Prev
of 3
Next >
...... ....*RE
11:17 PM
DELL
ear
3/10/2022

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
ok
Desired ending inventory of raw materials is
10% of the next quarter's production needs
nt
• Raw materials inventory, beginning
23,000 pounds
• Raw material costs
0.80 per pound
nces
• 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, beginning balance
81,500
< Prev
of 3
Next >
..
%24
%24
%24
%24

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