Final answer:
To compute the total expected cash collections, multiply the budgeted unit sales by the selling price for each quarter and sum them up. The total required production is the sum of budgeted unit sales for all quarters. A milling machine production constraint is a potential issue for quarters exceeding 80,000 units.
Step-by-step explanation:
To calculate the total expected cash collections for the year under the revised budget, we need to multiply the budgeted unit sales by the revised selling price. Using the provided figures, the calculation would be as follows: (45,000 units × $7) + (70,000 units × $7) + (105,000 units × $7) + (70,000 units × $7) + (90,000 units × $7) + (100,000 units × $7). After performing these calculations, you will get the total cash collections.
For the total required production for the year, simply add up the budgeted unit sales for each quarter: 45,000 + 70,000 + 105,000 + 70,000 + 90,000 + 100,000 units.
The total cost of raw materials to be purchased for the year would depend on additional data such as the cost per unit for raw materials, which is not provided in the question. Supposing the cost was available, you would multiply the cost per unit of raw material by the total number of units required.
To determine the total expected cash disbursements for raw materials, you would multiply the total units required for production by the cost per unit for raw materials, taking into account any payment terms or periods.
The production constraint of 80,000 units per quarter due to the capacity of a milling machine is a potential problem, as the budgeted unit sales for the third quarter in Year 2 and the second quarter in Year 3 exceed this maximum production limit.