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 18,400 nozzles in stock, although the latest estimate for August production indicates a requirement for only 18,200 nozzles. Total uses of the nozzle are expected to be 17,900 in September and 18,740 in October.

Nozzles are purchased at a wholesale price of $24. 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 37,000 parts in July.

Required:

a. Estimate purchases of the nozzle (in units) for August and September.

b. Estimate the cash disbursements for nozzles in August and September.

(-200 for August and 17,700 in September are incorrect for a)

(-120 for August and 317,520 for September are incorrect for b)