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PROBLEM 830 Integration of the Sales, Production, and Direct Materials Budgets L08-2, L08-3@, LO8-40 Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation: a The Marketing Department has estimated sales as follows for the remainder of the year (in units): July 30,000 October 20,000 August 70,000 November 10,000 September 50.000 December 10,000 The selling pripof the beach umbrellas is $12 per unit. b. All sales are on account. Based on past experience, sales are collected in the following pattem 30% in the month of sale 65% in the month following sele 5% uncollectible Sales for June totaled $300,000 The company maintains finished goods inventories equal to 150 of the following month's sales This requirement Page 384 will be met at the end of June. . Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acqure. Therefore, the company requires that the ending inventory of Gilden be equal to 50% of the following month's production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be 72.000 feet June 30 September 30 2 feet el Gilden costa so 80 per foot One-half of a month's purchases of Gilden is paid for in the month of purchase the remainder is paid for the following month. The accounts payable on July 1 for purchases of Gilden during June will be $76.000 Rocuired: Required: 1. Calculate the estimated sales, by month and in total, for the third quarter (Hint: Refer to Schedule 1 for guidanice). 2. Calculate the expected cash collections, by month and in total, for the third quarter (Hint: Refer to Schedule 1 for guidance) 3. Calculate the estimated quantity of beach umbrellas that need to be produced in July August September, and October (Hint: Refer to Schedule 2 for guidance) 4. Calculate the quantity of Gilden (in feet) that needs to be purchased by month and in total, for the third quarter (Hint: Refer to Schedule 3 for guidance) 5. Calculate the cost of the raw material (Gilden) purchases by month and in total, for the third quarter (Hint: Refer to Schedule 3 for guidance) 6. Calculate the expected cash disbursements for raw material (Gilden purchases, by month and in total, for the third quarter (Hint: Refer to Schedule 3 for guidance)