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):31,500 October 21,500November 8,00073,000September 42,000 December 8,500JulyAugustThe 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:30 in the month of sale65% in the month following sale5 uncollectibleSales for June totaled $264,000.c. The company maintains finished goods inventories equal to 15% of the following month's sales. This requirement will be met at theend 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 be: June 30September 3075,450 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 paidfor in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $48,920.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.Complete this question by entering your answers in the tabs below.Req 1Req 2Req 3Required production in unitsReq 4 and 5Req 6Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, September, and October.JulyAugust September October

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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 August 31,500 October 21,500 73,000 November 8,000 8,500 September 42,000 December The 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: 30% in the month of sale 65% in the month following sale 5 uncollectible Sales for June totaled $264,000. c. 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. 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:

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 August 31,500 October 21,500 73,000 November 8,000 8,500 September 42,000 December The 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: 30% in the month of sale 65% in the month following sale 5 uncollectible Sales for June totaled $264,000. c. 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. 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:

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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