$5$

Water Sport Inc. manufactures a small personal water tube used for children learning to swim. Management is now preparing detailed budgets for the third quarter, July through September, and has assembled the following information to assist:

$2$ points

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a$.$ The Marketing Department has estimated sales as follows for the remainder of the year $($number of water tubes$)$:

$\backslash$table$[[$July$,6,500,$October,$3,000],[$August$,5,000,$November,$2,500],[$September$,4,000,$December,$2,000]]$

The selling price of the water tubes is $$60.$

b$.$ All sales are on account. Based on past experience, sales are expected to be collected in the following pattern:The beginning accounts receivable balance $($excluding uncollectible amounts$)$ on July $1$ will be $$160,000.$c$.$ The company maintains finished goods inventories equal to $20\%$ of the following month's sales. The inventory of finished goods on July $1$ will be $1,300$ units.d$.$ Each water tube requires $3$ kilograms of synthetic polyisoprene rubber compound. To prevent shortages, the company would like the inventory of synthetic rubber compound on hand at the end of each month to be equal to $20\%$ of the following month's production needs. The inventory of synthetic rubber compound on hand on July $1$ will be $3,720$ kilograms.