Chapter 9 Assignment A Saved Help sa Problem 9-19 Integration of Sales, Production, and Direct Materials Purchases Budgets (LO2] 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: Points 20 points a. The Marketing Department has estimated sales as follows for the remainder of the year (number of water tubes): eBook July August September 8,500 October 7,000 November 6,000 December 4,900 4,500 4,000 Ask Print The selling price of the water tubes is $50. b. All sales are on account. Based on past experience, sales are expected to be collected in the following pattern: 50% in the month of sale 45% in the month following sale 5% uncollectible The beginning accounts receivable balance (excluding uncollectible amounts) on July 1 will be $170,000. 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 1,700 units. d. Each water tube requires 4 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 6,560 kilograms. e The cynthetic rubber comnound costs $250 ner kilogram Water Snort nave for 70% of its purchases in the month of nurchase the Chapter 9 Assignment i Saved -.. . -- - - - - - - -- - production needs. The inventory of synthetic rubber compound on hand on July 1 will be 6,560 kilograms. e. The synthetic rubber compound costs $3.50 per kilogram. Water Sport pays for 70% of its purchases in the month of purchase; the remainder is paid for in the following month. The accounts payable balance for synthetic rubber compound purchases will be $17,400 on July 1. 20 Required: 1. Prepare a sales budget, by month and in total, for the third quarter. (Show your budget in both units of water tubes and dollars.) Also prepare a schedule of expected cash collections, by month and in total, for the third quarter. points eBook Sales budget August July September Quarter Ask Print Budgeted sales (units) Selling price per unit Total budgeted sales Schedule of expected cash collections July August September Q uarter Accounts receivable, beginning balance July sales: August sales: September sales: Total cash collections 00 Chapter 9 Assignment Saved September sales: Total cash collections 0 0 0 0 20 points 2. Prepare a production budget for each of the months July through October. Production budget July August August eBook Septembe September October Ask Budgeted sales (units) Print Total needs 0 0 0 Required production (units) 0 0 Chapter 9 Assignment Saved 3. Prepare a direct materials purchases budget for synthetic rubber compound, by month and in total, for the third quarter. Also prepare a schedule of expected cash disbursements for synthetic rubber compound, by month and in total, for the third quarter. Direct materials purchases budget July August September Quarter 20 points Required production (units) Material D236 needed per unit (kgs.) Production needs (kgs.) eBook Total Material D236 needs 0 0 0 0 Ask Print 0 0 0 0 Raw materials to be purchased Cost of raw materials to be purchased at $3.50 per kg September Schedule of expected cash disbursement July August Accounts payable, beginning balance July purchases: August purchases: September purchases: Total cash disbursements 0 $ 0 $ 0 $
