Question

1 Enter titles and accounts in the green cells 2 Enter Numbers in the blue cells 3 Enter your Calculations in the yellow cells Dallas Company manufactures table cloths. The company is in the process of developing next quarter's budgets and has gathered the following information for the budget preparation: a. The Marketing Department has estimated sales as follows for the remainder of the year (in units): 8 9 10 July August September 25,000 40,000 39,000 October November December 20,000 25,000 37,500 12 a. The selling price. 13 b. All sales are on account. Based on past experience, sales 14 are collected in the following pattern: 25% in the month of sale 70% in the month following sale uncollectibl Problem 1 Problem 2

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Answer 1

Solution:

1. Calculation of the budgeted sales, by month and in total for th quarter July August September Quarter Budgeted Units Sales (Qty) 25,000| 40,000 39,000 1,04,000 Selling Price per unit (S) 11 Budgeted Sales ($) 25.000 40.000 39,000 1,04,000 2. Calculation of net expected cash balances, by month and in total, for the quarter The expected cash collections from sales for the third quarter July August September Quarter June Sales 3,67,500 3,67,500 July Sales 6,250 17,500 23,750 August Sales 10,000 28,000 38,000 September Sales 9,750 9,750 Total Cash Collections 3,73,750 27,500 37,750 4,39,000

3. Calculation of the estimated quantity of beach umbrellas that need to be produced in July, August, September and October The Production budget (quantity of beach umbrellas) for July-October) July August September October Budgeted Unit Sales 25,000 40,000 39,000 20,000 Add: Desired units of ending 8,000 7,800 4,000 5,000 Finished goods inventory Total Needs 33,000 47,800 43,000 25,000 Less: Units of beginning finished 8.000 7,800 goods inventory Required production in units 28,000 39,800 35,200 21,000 5,000 4,000

24 4. Calculation of the quantity of material (in feet) that need to be purchased by month and in total and also calculation of the raw material purchases for each month The direct material budget for the 3rd quarter July August September October Required production in units of 28,000 39,800 35,200 21,000 finished goods Units of Raw materials needed per unit of finished goods Units of Raw materials needed to 1,68,000 2,38,800 2,11,200 1,26,000 meet production Add: Desired units of ending raw 1,43,280 1,26,720 75,600 NA material inventory Total units of raw material 3,11,280 3,65,520 2,86,800 NA needed Less: Units of beginning raw 95,000 1,26,720 Ν.Α. materials inventory Units of raw material to be 2,16,280 2,22,240 1,60,080 Ν.Α. purchased Unit cost of raw materials N.A. Cost of raw materials to be 2,16,280 2,22,240 1,60,080 N.A. purchased