Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Eliot Sprinkler Systems produces equipment for lawn irrigation. One of the parts used in selected Eliot equipment is a specialty nozzle. The budgeting team is

Eliot Sprinkler Systems produces equipment for lawn irrigation. One of the parts used in selected Eliot equipment is a specialty nozzle. The budgeting team is now determining the purchase requirements and monthly cash disbursements for this part.
Eliot wishes to have in stock enough nozzles to use for the coming month. On August 1, the company has 17,400 nozzles in stock, although the latest estimate for August production indicates a requirement for only 16,200 nozzles. Total uses of the nozzle are expected to be 15,900 in September and 16,740 in October.
Nozzles are purchased at a wholesale price of $14. Eliot pays 25 percent of the purchase price in cash in the month when the parts are delivered. The remaining 75 percent is paid in the following month. Eliot purchased 27,000 parts in July.
Required:
Estimate purchases of the nozzle (in units) for August and September.
Estimate the cash disbursements for nozzles in August and September.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Reduction Systems Target Costing And Kaizen Costing

Authors: Yasuhiro Monden

1st Edition

1563270684, 978-1563270680

Students also viewed these Accounting questions

Question

5. How is Mr. Bonner encouraging Marcuss self-efficacy?

Answered: 1 week ago