Problem 8-30 (Static) Integration of the Sales, Production, and Direct Materials Budgets [LO8-2, LO8-3,LO8-4]Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled thefollowing information to assist in the budget preparation:a The Marketing Department has estimated sales as follows for the remainder of the year (in units)30,000 October70,000 NovemberSeptember 50,000 December 10,000JulyAugustThe selling price of the beach umbrellas is $12 per unit.b. All sales are on account. Based on past experience, sales are collected in the following pattern:20,00010,00030% in the month of sale65% in the month following sale5% uncollectibleSales for June totaled $300.000c. The company maintains finished goods inventories equal to 15% of the following month's sales. This requirement will be met at theend of Juned. Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires thatthe ending inventory of Gilden be equal to 50% of the following month's production needs. The inventory of Gilden on hand at thebeginning and end of the quarter will be:June 30September 3072,000 feet2 feete 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 forin the following month. The accounts payable on July 1 for purchases of Gilden during June will be $76,000. end of June.d. Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires thatthe ending inventory of Gilden be equal to 50% of the following month's production needs. The inventory of Gilden on hand at thebeginning and end of the quarter will beJuneSeptember 3072,000 Feetfeete 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 forin the following month. The accounts payable on July 1 for purchases of Gilden during June will be $76,000Required:1. Calculate the estimated sales, by month and in total, for the third quarter2. 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 quarter5. 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.Complete this question by entering your answers in the tabs below.RegBudgeted salenReg 2Red 3JulyReg 4 and 5Calculate the estimated sales, by month and in total, for the third quarter.AugustSeptemberwill be met at theRegMINKYQuarterReq 2 >D

Hi student,Since there are multiple subparts, we will answer only first three subparts. A budget can…

Answered: d. Each beach umbrella requires 4 feet…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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