90.2K

Verified Solution

Link Copied!

Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation: a. The Marketing Department has estimated sales as follows for the remainder of the year (in units); July 41,000 October 31,000 August 92,000 November 17,500 September 61,000 December 18,000 The selling price of the beach umbrellas is $13 per unit. b. All sales are on account Based on past experience, sales are collected in the following pattern: 30% in the month of sale 654 in the month following sale 54 uncollectible Sales for June totaled $533,000, c. The company maintains finished goods Inventoriis equal to 15% of the following month's sales. This requirement will be met at the end of June. d. Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires that the ending inventory of Gilden be equal to 50% of the following month's production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be: June 30 September 30 97,300 feet 7 feet June 30 September 30 97,300 feet 7 feet e. Gliden costs $0.60 per foot. One-half of a month's purchases of Gilden is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $53,790 3:05 Required: 1. Calculate the estimated sales, by month and in total, for the third quarter. 2. Calculate the expected cash collections, by month and in total, for the third quarter. 3. Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, September, and October 4. Calculate the quantity of Gilden (in feet) that needs to be purchased by month and in total, for the third quarter, 5. Calculate the cost of the raw material (Gliden) purchases by month and in total, for the third quarter. 6. Calculate the expected cash disbursements for raw material (Gilden) purchases, by month and in total, for the third quarter. 205 Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Req 4 and 5 Reg 6 Calculate the estimated sales, by month and in total, for the third quarter. July August September Quarter Budgeted sales $ 0 Reg 2 > June 30 September 30 97,300 feet 2 feet e. Gilden costs $0.60 per foot. One-half of a month's purchases of Gilden is paid for in the mo for in the following month. The accounts payable on July 1 for purchases of Gilden during Required: 1. Calculate the estimated sales, by month and in total, for the third quarter. 2. Calculate the expected cash collections, by month and in total, for the third quarter. 3. Calculate the estimated quantity of beach umbrellas that need to be produced in July, Augu 4. Calculate the quantity of Gilden (in feet) that needs to be purchased by month and in total, fc 5. Calculate the cost of the raw material (Gilden) purchases by month and in total, for the third 6. Calculate the expected cash disbursements for raw material (Gilden) purchases, by month an Complete this question by entering your answers in the tabs below. 3 Req 1 Req 2 Rega Req 4 and 5 Reg 6 Calculate the expected cash collections, wy month and in total, for the third quarter. Rog 3 July August September Quarter Total cash collections

Answer & Explanation Solved by verified expert

See Answer