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):

The selling price of the swim fins is $15 per pair.

July	5,200	October	3,200
August	6,200	November	2,200
September	4,200	December	2,200

b.	All sales are on account. Based on past experience, sales are expected to be collected in the following pattern:

44%	in the month of sale
47%	in the month following sale
9%	uncollectible

The beginning accounts receivable balance (excluding uncollectible amounts) on July 1 will be $134,000.

c.	The company maintains finished goods inventories equal to 12% of the following months sales. The inventory of finished goods on July 1 will be 624 pairs.

d.

Each pair of swim fins requires 5 pounds of geico compound. To prevent shortages, the company would like the inventory of geico compound on hand at the end of each month to be equal to 20% of the following months production needs. The inventory of geico compound on hand on July 1 will be 5,320 pounds.

e.	Geico compound costs $3.00 per pound. Crydon pays for 59% of its purchases in the month of purchase; the remainder is paid for in the following month. The accounts payable balance for geico compound purchases will be $11,100 on July 1.

Required:

1a.	Prepare a sales budget, by month and in total, for the third quarter. July august september quarter budgeted sales(pair) Selling price per pair total budgeted sales

1b.	Prepare a schedule of expected cash collections, by month and in total, for the third quarter.

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. July august september octomber budgeted sales (pairs) total needed required productions

3a.	Prepare a direct materials budget for geico compound, by month and in total, for the third quarter. (Do not round intermediate calculations.) July august september quarter
	required production pairs raw material needed per pair productions needs total needs raw material to be purchased cost of raw material to be pur

3b.	Prepare a schedule of expected cash disbursements for geico compound, by month and in total, for the third quarter. (Do not round intermediate calculations.) July ausust september quarter

accounts payable, beginning balance

july purchases

august purchases

september purchases

total cash disburments