The company has just hired a new marketing manager who insists that unit sales c
ID: 2478909 • 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:
Year 2 Quarter
Year 3 Quarter
A
B
C
D
E
F
F
What are the total expected cash collections for the year under this revised budget?
What is the total required production for the year under this revised budget?
What is the total cost of raw materials to be purchased for the year under this revised budget?
What are the total expected cash disbursements for raw materials for the year under this revised budget?
DataYear 2 Quarter
Year 3 Quarter
1 2 3 4 1 2 Budgeted unit sales 45,000 65,000 110,000 65,000 80,000 95,000 Selling price per unit $7 per unitExplanation / Answer
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Answer:
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Sales budget Particulars 1 2 3 4 Total Sales unit 45000 65000 110000 65000 285000 Selling Price 7 7 7 7 7 Sales ($) 315000 455000 770000 455000 1995000 Schedule of expected cash collections Particulars 1 2 3 4 Total 75% sales are collected in the quarter sales made 236250 341250 577500 341250 1496250 25% collected in quarter after sales made 65000 78750 113750 192500 450000 Total cash collections 301250 420000 691250 533750 1946250