Answer Happy

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:
The Marketing Department has estimated sales as follows for the
remainder of the year (in units):
The selling price of the beach umbrellas is $11 per unit.
All sales are on account. Based on past experience, sales are
collected in the following pattern:
Sales for June totaled $297,000.
The company maintains finished goods inventories equal to 15% of
the following month’s sales. This requirement will be met at the
end of June.
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:
Gilden costs $0.80 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 $54,920.
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 (Gilden) 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.
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 & 5.
Calculate the quantity of Gilden (in feet) that needs to be
purchased by month and in total, for the third quarter. Calculate
the cost of the raw material (Gilden) purchases by month and in
total, for the third quarter. (Round your Unit cost of raw
materials to 2 decimal places.)
6.
Calculate the expected cash disbursements for raw material
(Gilden) purchases, by month and in total, for the third
quarter.