The company has just hired a new marketing manager who insists that unit sales c
ID: 2436963 • Letter: T
Question
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: 2 Quarter 50,000 65,000 105,000 75,000 85,000 90,000 Budgeted unit sales Selling price per unit $7 per unit 1 Chapter 7: Applying Excel 3 Data 5 Budgeted unit sales Year 2 Quarter Year 3 Quarter 50.000 66,000 10000 75,000 5,000 90,000 7Selling price per unit 8Accounts recevable, beginning balance 9 Sales collected in the quarter sales are made 0 .Sales collected in the quarter 11 Desired ending firished goods inventoryi 12 Finished goods invertiory, beginning 3 Raw materials required to produce one unit 4 Desired ending inventory of raw materials s 5Raw materials inventory, beginning 6 Raw material costs 17Raw materials purchases are paid 18 and 19 Accounts payable for raw materials, beginning balance$81 20 s8 per unit $65,000 75% 25% so% of the budgeted unt sales of the next quarter after sales are made 12,000 units 5 pounds 10% of the next quarters product on needs 23,000 pounds 50.80 per pound 60% I'm quarter the purchases are made 40% in the quarter fellowing purchase ,500Explanation / Answer
A)Quarter 1 = 50000units *7*0.75(current year)= 262500 + 65000 ( opening Accounts Receivable Balance = 327500
Quarter 2 = 350000*0.25 + 65000*0.75*7= 422500
Quarter 3 = 455000*0.25+735000*0.75=113750+551250=655000
Quarter 4 = 75000*0.75*7+735000*0.25= 577500
Total = 1982500 Collection from sale of goods and subsequent and current cash collections
B)
c)
D)
e)Yes since because a set of cash flow assumptions depend on the fact that production would be above 80000units in Q3 and Q4
Q1 Q2 Q3 Q4 Q1 Current Quarter sales 50000 65000 105000 75000 85000 Closing inventory 30%of projected sales of next quarter 19500 31500 22500 25500 less- op inventory -12000 -19500 -31500 -22500 Production per quarter 57500 77000 96000 78000 therefore total equals 308500