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 Budgeted unit sales Selling price per unit 45,000 $7 70,000 120,000 60,000 80,000 95,000 A B D Chapter 8: Applying Excel 2 3 Data Year 3 Quarter 4 1 2 3 4. Budgeted unit sales 45,000 70,000 120,000 60.000 80,000 95,000 6 7 Selling price per unit $ 7 per unit 8 · Accounts receivable, beginning balance $ 65,000 9 Sales collected in the quarter sales are made 75% 10 Sales collected in the quarter after sales are made 25% 11 Desired ending finished goods inventory is 30% of the budgeted unit sales of the next quarter • Finished goods inventory, beginning • Raw materials required to produce one unit 12 12,000 units 5 pounds 10% of the next quarter's production needs 23,000 pounds 13 14 • Desired ending inventory of raw materials is 15 · Raw materials inventory, beginning 16 · Raw material costs $ 0.80 per pound 17 · Raw materials purchases are paid 60% in the quarter the purchases are made 18 and 40%| in the quarter following purchase 19 Accounts payable for raw materials, beginning balance $ 81,500
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

 alt="Required information
a. What are the total expected cash collections for the year under this revised budget?
Expected cash collections for the year
b. What is the total required production for the year under this revised budget?
Total required production for the year
c. What is the total cost of raw materials to be purchased for the year under this revised budget?
Total cost of raw materials to be purchased for the year
d. What are the total expected cash disbursements for raw materials for the year under this revised budget?
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