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Data
Review Problem: Budget Schedules
Year 2 Quarter Year 3 Quarter 1 2 3 4 1 2
Enter a formula into each of the cells marked with a? below
Year 2 Quarter Year 3 Quarter 1 2 3 4 1 2
Year 2 Quarter 1 2 3 4 Year
Year 2 Quarter Year Year 3 Quarter 1 2 3 4 1 2
Year 2 Quarter Year 3 Quarter 1 2 3 4 Year 1
Year 2 Quarter 1 2 3 4 Year
Budgeted unit sales 40,000 60,000 100,000 50,000 70,000 80,
- Selling price per unit $
- Accounts receivable, beginning balance $65,
- 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 $0.80 per pound
- Raw materials purchases are paid 60% in the quarter the purchases are made and 40% in the quarter following purchase $81,
Budgeted unit sales 40,000 60,000 100,000 50,000 70,000 80, Selling price per unit $8 $8 $8 $8 $8 $ Total sales $320,000^ $480,000^ $800,000^ $400,000^ $560,000^ $640,
Beginning balance accounts receivable $ 65,000 $ 65, First-quarter sales 240,000 $ 80,000 $ 320, Second-quarter sales 360,000 $ 120,000 $ 480, Third-quarter sales 600,000 $ $ 800, Fourth-quarter sales 300,000 $ 300, Total cash collections $ 305,000^ $^ 440,000^ $ 720,000^ $^ $
Budgeted unit sales 40,000 60,000 100,000 50,000 250,000 70,000 80, Add desired ending finished goods inventory 18,000 30,000 15,000 21,000 84,000 24, Total needs 58,000 90,000 115,000 71,000 334,000 94, Less beginning finished goods inventory 12,000 18,000 30,000 15,000 75,000 21, Required production in units 46,000^ 72,000^ 85,000^ 56,000^ 259,000^ 73,
Required production (units) 46,000 72,000 85,000 56,000 73, Raw materials required to produce one unit (pounds) 5 5 5 5 5 Production needs (pounds) 230,000 360,000 425,000 280,000 365, 36,000 42,500 28,000 36, Total needs (pounds) 266,000 402,500 453,000 316, Less beginning inventory of raw materials (pounds) 23,000 36,000 42,500 28, Raw materials to be purchased (pounds) 243,000 366,500 410,500 288, Cost of raw materials per pound $0.80 $0.80 $0.80 $0. Cost of raw materials to be purchased $194,400^ $293,200^ $328,400^ $230,800^ $1,046,
Beginning balance accounts payable $ 81,500 $ 81, First-quarter purchases 116,640 $ 77,760 $ 194, Second-quarter purchases 175,920 $ 117,280 $ 293, Third-quarter purchases 197,040 $ $ 328, Fourth-quarter purchases 138,480 $ 138, Total cash disbursements $ 198,140^ $^ 253,680^ $ 314,320^ $^ $
- Accounts payable for raw materials, beginning balanc
Add desired ending inventory of raw materials (pounds)
Construct the sales budget
Construct the production budget
Construct the raw materials purchases budget
Construct the schedule of expected cash collection
Construct the schedule of expected cash payments
Data
75,
Review Problem: Budget Schedules
Year 2 Quarter Year 3 Quarter 1 2 3 4 1 2
Enter a formula into each of the cells marked with a? below
Year 2 Quarter Year 3 Quarter 1 2 3 4 1 2
Year 2 Quarter 1 2 3 4 Year
Year 2 Quarter Year Year 3 Quarter 1 2 3 4 1 2
Year 2 Quarter Year 3 Quarter 1 2 3 4 Year 1
Year 2 Quarter 1 2 3 4 Year
Budgeted unit sales 40,000 100,000 50,000 70,000 80,
- Selling price per unit $
- Accounts receivable, beginning balance $65,
- 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 $0.80 per pound
- Raw materials purchases are paid 60% in the quarter the purchases are made and 40% in the quarter following purchase $81,
Budgeted unit sales 40,000 75,000 100,000 50,000 70,000 80, Selling price per unit $8 $8 $8 $8 $8 $ Total sales $320,000^ $600,000^ $800,000^ $400,000^ $560,000^ $640,
Beginning balance accounts receivable $ 65,000 $ 65, First-quarter sales 240,000 $ 80,000 $ 320, Second-quarter sales 450,000 $ 150,000 $ 600, Third-quarter sales 600,000 $ $ 800, Fourth-quarter sales 300,000 $ 300, Total cash collections $ 305,000^ $^ 530,000^ $ 750,000^ $
Budgeted unit sales 40,000 75,000 100,000 50,000 265,000 70,000 80, Add desired ending finished goods inventory 22,500 30,000 15,000 21,000 88,500 24, Total needs 62,500 105,000 115,000 71,000 353,500 94, Less beginning finished goods inventory 12,000 22,500 30,000 15,000 79,500 21, Required production in units 50,500^ 82,500^ 85,000^ 56,000^ 274,000^ 73,
Required production (units) 50,500 82,500 85,000 56,000 73, Raw materials required to produce one unit (pounds) 5 5 5 5 5 Production needs (pounds) 252,500 412,500 425,000 280,000 365, 41,250 42,500 28,000 36, Total needs (pounds) 293,750 455,000 453,000 316, Less beginning inventory of raw materials (pounds) 23,000 41,250 42,500 28, Raw materials to be purchased (pounds) 270,750 413,750 410,500 288, Cost of raw materials per pound $0.80 $0.80 $0.80 $0.80 $0. Cost of raw materials to be purchased $216,600^ $331,000^ $328,400^ $230,
Beginning balance accounts payable $ 81,500 $ 81, First-quarter purchases 129,960 $ 86,640 $ 216, Second-quarter purchases 198,600 $ 132,400 $ 331, Third-quarter purchases 197,040 $ $ 328, Fourth-quarter purchases 138,480 $ 138, Total cash disbursements $^ 211,460^ $^ 285,240^ $ 329,440^ $
The reason is that when the budgeted unit sales increase, the required production in units will consequently increase. In this way, the raw materials will increase to cover for the increase in production, which will cause total cash disbursements for raw materials to increase.
- Accounts payable for raw materials, beginning balanc
Add desired ending inventory of raw materials (pounds)
Construct the sales budget
Construct the production budget
Construct the raw materials purchases budget
Construct the schedule of expected cash collection
Construct the schedule of expected cash payments
