9-27 Integration of the Sales, Production, and Direct Materials Budgets (L02, L03, LO 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 an a July August September 30,000 70,000 50,000 October 20,000 November 10,000 December 10.000 The selling price of the beach umbrellas is $12 per unit. Prepare a sales budget, production budget, and direct materials budget for company in problem 9-27 (p. 411) p9-27(1).pdf p9-27(2).pdf Minimize File Preview - ZOOM + Profit Planning 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 $300,000, 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 72,000 feet ? feet 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 $76,000 Proared Prepare a sales budget, by month and in total, for the third quarter (Show your budget in both units and dollars.) Also prepare a schedule of expected cash collections, by month and in total, for the third quarter. Prepare a production budget for each of the mods July-October Prepare a direct materials budget for Gilden, by mouth and in soal, for the third quarter Abso prepare a schedule of expected cash disbursements for Gildes, by mood and is total, for the third quarter 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. 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 72,000 feet ? feet 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 I for purchases of Gilden during June will be $76,000. Pequired: Prepare a sales budget, by month and in total, for the third quarter. (Show your budget in both units and dollars.) Also prepare a schedule of expected cash collections, by month and in total, for the third quarter. Prepare a production budget for each of the months July-October Prepare a direct materials budget for Gilden, by mouth and in total, for the third quarter. Also prepare a schedule of expected cash disbursements for Gilden, by month and in total, for the third quarter. PROBLEM 9-28 Completing a Master Budget (L02, L04, LO7, LOS LOS LO10 on a quarterly basis The following data have been assembled to assist in preparing the mer budget for the first quarter As of following account balances: Cebity $41,000 Credits : please do not prepare the cash collections budget. Show the budgets for July, August, September. and for the quarter (July-September). Note: conce Since you do not need to do a cash collections budget, you don't need to refer to the "sales pattern (30% in the month of sales, 65% in the month after the sale, and 5% uncollectible)." Don't do a cash payments/disbursements budget