647821959.

xls

Chapter 8: Applying Excel

Data Year 2 Quarter Year 3

1 2 3 4 1
Budgeted unit sales 40,000 60,000 10
100,000 50,000 70,000

• Selling price per unit $8 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
• Desired ending inventory of raw materials is 10% of the next quarter's production needs
• Raw materials inventory, beginning 23,000 po
p ounds
• 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
• Acc
Accou
ount
nts
sppay
ayab
able
le fo
forr rraw
aw mate
materi
rial
als,
s, be
begi
ginn
nnin
ing
g bal
balan
ance
ce $81,
$81,50
500
0

Enter a formula into each of the cells marked with a ? below

Review Problem: Budget Schedules

Construct the sales budget Year 2 Quarter Year 3

1 2 3 4 1
Budgeted unit sales 40,000 60,000 100,000 50,000 70,000
Selling price per unit $8 $8 $8 $8 $8
Total sales $320,000 $480,000 $800,000 $400,000 $560,000

Construct the schedule of expected cash

c ash collections Year 2 Quarter
1 2 3 4 Year
Accounts receivable, beginning balance $ 65,000 $ 65,000
First-quarter sales 240,000 $ 80,000 320,000
Second-quarter sales 360,000 $ 120,000 480,000
Third-quarter sales 600,000 $ 200,000 800,000
Fourth-quarter sales 300,000 300,000
Total cash collections $ 305,000 $ 440,000 $ 720,000 $ 500,000 $ 1,965,000
Construct the production budget Year 2 Quarter
1 2 3 4 Year
Budgeted unit sales 40,000 60,000 10
100,000 50,000 250,000
Add desired finished goods inventory 18,000 30,000 15,000 21,000 21,000
Total needs 58,000 90,000 115,000 71,000 27
2 71,000
Less beginning inventory 12,000 18,000 30,000 15,000 12,000
Required production 46,000 72,000 85,000 56,000 259,000

Construct the raw materials purchases budget Year 2 Quarter

1 2 3 4 Year
Required production (units) 46,000 72,000 85,000 56,000 259,000
Raw materials required to produce one unit 5 5 5 5 5
Production needs (pounds) 230,000 360,000 425,000 280,000 1,295,000
Add desired ending inventory of raw materials (pounds) 36,000 42,500 28,000 36,500 36,500
Total needs (pounds) 266,000 402,500 453,000 3
3116,500 1,331,500
Le
Less
ss begi
beginn
nnin
ing
g in
inve
vent
ntor
ory
y of raw
raw mate
materi
rial
als
s (pou
(pound
nds)
s) 23
23,0
,000
00 36
36,0
,000
00 42
42,5
,500
00 28
28,0
,000
00 23,0
23,000
00
 647821959.xls

Raw materials to be purchased 243,000 366,500 410,500 288,500 1,308,500

Cost of raw materials per pound $0.80 $0.80 $0.80 $0.80 $0.80
Cost of raw materials to be purchased $194,400 $293,200 $328,400 $230,800 $1,046,800

Construct the schedule of expected cash payments Year 2 Quarter

1 2 3 4 Year
Accounts payable, beginning balance $ 81,500 $ 81,500
First-quarter purchases 116,640 $ 77,760 194,400
Second-quarter purchases 175,920 $ 117,280 293,200
Third-quarter purchases 197,040 $ 131,360 328,400
Fourth-quarter purchases 138,480 138,480
Total cash disbursements $ 198,140 $ 253,680 $ 314,320 $ 269,840 $ 1,035,980
 647821959.xls

Quarter
2
80,000

Quarter
2
80,000
$8
$640,000

Year 3 Quarter
1 2
70,000 80,000
24,000
94,000
21,000
73,000

Year 3 Quarter
1
73,000
5
365,000