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 remander of the year (in units): July August Septemben 33,000 October 76,000 November 45,000 December 23,000 9,500 10,000 The selling price of the beach umbrellas is $15 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 $375,000. 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: June 30 September 30 78,900 feet ? feet e. Gilden 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 $39,390 Required:Calculate the estimated sales, by month and in total, for the third quarter. Calculate the expected cash collections, by month and in total, for the third quarter. Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, Septembehand October. 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.

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 remander of the year (in units): July August Septemben 33,000 October 76,000 November 45,000 December 23,000 9,500 10,000 The selling price of the beach umbrellas is $15 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 $375,000. 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: June 30 September 30 78,900 feet ? feet e. Gilden 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 $39,390 Required:Calculate the estimated sales, by month and in total, for the third quarter. Calculate the expected cash collections, by month and in total, for the third quarter. Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, Septembehand October. 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

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 remander of the year (in units):

July

August

Septemben

33,000

October

76,000

November

45,000 December

23,000

9,500

10,000

The selling price of the beach umbrellas is $15 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 $375,000.

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:

June 30

September 30

78,900 feet

? feet

e. Gilden 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 $39,390

Required:Calculate the estimated sales, by month and in total, for the third quarter.

Calculate the expected cash collections, by month and in total, for the third quarter.

Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, Septembehand October.

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.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 3 images

SEE SOLUTION Check out a sample Q&A here