Cherry Paddleboards Inc (year end Dec 31) manufactures paddles to be used with inflatable paddleboards that are very popular with campers and outdoor adventurers. The budgets for the third quarter are being compiled with the following info: i) The selling price of the paddles are $60 each. The estimated sales in units, for the remainder of the year is as follows: July Aug 7,900 6,400 Sept 5,400 Oct 4,300 3,900 3,400 Nov Dec ii) The Accounts Receivable (net) balance on July 1 is $167,000. iii) These paddles are purchased 100% on account. The expected collection pattern is as follows: 50% in the month of sale 45% in the month following the sale 5% uncollectible iv) The company always wants to have finished goods inventory equal to 20% of the following month's sales. The inventory of finished goods on July 1 will be 1,580 units. v) Each paddle requires 3 kg of material. To ensure that they have enough on hand, the company would like to have 20% of the following month's production needs. The inventory of raw materials at July 1 will be 4,560 kgs. Required: The raw materials cost $2.50 per kg. The company pay for 70% of its purchases in the month of the purchase, the rest is paid for in the following month. The Accounts Payable balance will be $15,600 on July 1. a) Prepare a sales budget by month and in total for the third quarter (2 marks). b) Prepare a schedule of expected cash collections by month and in total for the third quarter (4 marks). c) Prepare a production budget for each month from July to October (2 marks). d) Prepare a direct materials purchases budget for raw materials, by month and in total, for the third quarter (4 marks). e) Prepare a schedule of expected cash disbursements for the raw materials, by month and in total, for the third quarter (4 marks). Cover Version 1 12 3 4 5 6 7 | MCQ | A