Crydon Inc. manufactures an advanced swim fin for scuba divers. Management is now preparing detailed budgets for the third quarter, July through September, and has assembled the following Information to assist in preparing the budget: a. The Marketing Department has estimated sales as follows for the remainder of the year (in pairs of swim fins): July August September 6,000 7,000 5, eee October November December 4,000 3,000 3,080 The selling price of the swim fins is $50 per pair b. All sales are on account. Based on past experience, sales are expected to be collected in the following pattern: 42% in the month of sale 58% in the month following sale 10% uncollectible The beginning accounts receivable balance (excluding uncollectible amounts) on July 1 will be $130,000. C. The company maintains finished goods inventories equal to 10% of the following month's sales. The inventory of finished goods on July 1 will be 600 pairs. d. Each pair of swim fins requires 2 kilograms of grelco compound. To prevent shortages, the company would like the inventory of grelco compound on hand at the end of each month to be equal to 20% of the following month's production needs. The inventory of grelco compound on hand on July 1 will be 2.440 kilograms. e. Grelco compound costs $2.50 per kilogram. Crydon pays for 60% of its purchases in the month of purchase the remainder is paid for in the following month. The accounts payable balance for grelco compound purchases will be $11,400 on July 1. Required: 1-a. Prepare a sales budget, by month and in total, for the third quarter. July August September Quarter Total budgeted sales 1-b. Prepare a schedule of expected cash collections, by month and in total, for the third quarter. Quarter Schedule of Expected Cash Collections July August September Accounts receivable, beginning balance July sales August sales September sales Total cash collections 2. Prepare a production budget for each of the months July through October Production Budget August July September October Budgeted sales (pairs) Total needs Required production (pairs) Crydon Inc. manufactures an advanced swim fin for scuba divers. Management is now preparing detailed budgets for the third quarter, July through September, and has assembled the following information to assist in preparing the budget: a. The Marketing Department has estimated sales as follows for the remainder of the year (in pairs of swim fins): July August September 6,080 7,000 5, ee October November December 4,990 3,000 3,080 The selling price of the swim fins is $50 per pair. b. All sales are on account. Based on past experience, sales are expected to be collected in the following patter: 40% in the month of sale 50% in the month following sale 10% uncollectible The beginning accounts receivable balance (excluding uncollectible amounts) on July 1 will be $130.000. c. The company maintains finished goods inventories equal to 10% of the following month's sales. The inventory of finished goods on July 1 will be 600 pairs. d. Each pair of swim fins requires 2 kilograms of grelco compound. To prevent shortages, the company would like the inventory of grelco compound on hand at the end of each month to be equal to 20% of the following month's production needs. The inventory of grelco compound on hand on July 1 will be 2.440 kilograms. e. Grelco compound costs $2.50 per kilogram. Crydon pays for 60% of its purchases in the month of purchase the remainder is paid for in the following month. The accounts payable balance for grelco compound purchases will be $11.400 on July 1. Required: 1-a. Prepare a sales budget, by month and in total, for the third quarter. July August September Quarter Total budgeted sales 1-b. Prepare a schedule of expected cash collections, by month and in total, for the third quarter. Quarter Schedule of Expected Cash Collections July August September Accounts receivable, beginning balance July sales August sales September sales Total cash collections 2. Prepare a production budget for each of the months July through October. Production Budget July August September October Budgeted sales (pairs) Total needs Required production (pairs) 3-a. Prepare a direct materials budget for grelco compound, by month and in total, for the third quarter. Direct Materials Budget July August September Quarter Production needs (kgs.) Total needs Raw materials to be purchased Cost of raw materials to be purchased 3-b. Prepare a schedule of expected cash disbursements for grelco compound, by month and in total, for the third quarter. Quarter Schedule of Expected Cash Disbursements July August September Accounts payable, beginning balance July sales August sales September sales Total cash disbursements