Swanson, Inc., manufactures an advanced swim fin for scuba divers. Management is now preparing detailed budgets for the third quarter, July through September, and has assembled the following information to assist in preparing the budget:

a.	The Marketing Department has estimated sales as follows for the remainder of the year (in pairs of swim fins). The selling price of the swim fins is $19 per pair.

July	6,200	October	4,200
August	7,200	November	3,200
September	5,200	December	3,200

b.	All sales are on account. Based on past experience, sales are expected to be collected in the following pattern:

43%	in the month of sale
48%	in the month following sale
9%	uncollectible

The beginning accounts receivable balance (excluding uncollectible amounts) on July 1 will be $148,000.

c.	The company maintains finished goods inventories equal to 9% of the following months sales. The inventory of finished goods on July 1 will be 558 pairs.

d.

Each pair of swim fins requires 4 pounds of geico compound. To prevent shortages, the company would like the inventory of geico compound on hand at the end of each month to be equal to 20% of the following months production needs. The inventory of geico compound on hand on July 1 will be 5,032 pounds.

e.

Geico compound costs $2.50 per pound. Crydon pays for 60% of its purchases in the month of purchase; the remainder is paid for in the following month. The accounts payable balance for geico compound purchases will be $13,000 on July 1. Required: 1a. Prepare a sales budget, by month and in total, for the third quarter. July August September Quarter - Total Total budgeted sales 1b. Prepare a schedule of expected cash collections, by month and in total, for the third quarter. (Do not round intermediate calculations.) Swanson, Inc. Schedule of Expected Cash Collections July August September Quarter - Total Accounts receivable, beginning balance July sales August sales September sales Total cash collections 2. Prepare a production budget for each of the months July through October. Swanson, Inc. Production Budget July August September October Budgeted sales (pairs) Total needs Required production (pairs) 3a. Prepare a direct materials budget for geico compound, by month and in total, for the third quarter. (Do not round intermediate calculations.) Swanson, Inc. Direct Materials Budget July August September Quarter - Total Production needs (lbs.) Total needs Raw materials to be purchased Cost of raw materials to be purchased 3b. Prepare a schedule of expected cash disbursements for geico compound, by month and in total, for the third quarter. (Do not round intermediate calculations.) Swanson, Inc. Schedule of Expected Cash Disbursements July August September Quarter - Total Accounts payable, beginning balance July purchases August purchases September purchases Total cash payments