LO 2 points 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): 31,000 October 72,000 November September 41,000 December The selling price of the beach umbrellas is $11 per unit. b. All sales are on account. Based on past experience, sales are collected in the following pattern: July August 30% in the month of sale 65% in the month following sale 5% uncollectible 21,000 7,500 8,000 Sales for June totaled $231,000. c. The company maintains finished goods inventories equal to 15% of the following month's sales. This requirement will be met at the end of June. d. Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. 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: June 30 September 30 74,300 feet ? feet e. Gilden costs $0.60 per foot. One-half of a month's purchases of Gilden is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $35,790. Required: 1. Calculate the estimated sales, by month and in total, for the third quarter. 2. Calculate the expected cash collections, by month and in total, for the third quarter. 3. Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, September, and October. 4. Calculate the quantity of Gilden (in feet) that needs to be purchased by month and in total, for the third quarter. 5. Calculate the cost of the raw material (Gilden) purchases by month and in total, for the third quarter. 6. Calculate the expected cash disbursements for raw material (Gilden) purchases, by month and in total, for the third quarter.

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): The selling price of the beach umbrellas is $11 per unit. b. All sales are on account. Based on past experience. sales are collected in the following pattern: 3ot in the month of sale 655 in the moth following sale 5s uncellectible Sales for June totaled 5231,000 c. The compary maintains tinished goods ieventones equal to 15% of the following month's sales, This requirement wal be met at the end of June. d. Each beach umbrella requires 4 feet of Glden, a material that is sometimes hard to acquire. Therefore, the company iequires that. the ending invermory or Giden be equal to 50 s of the following month's production nceds. The imventory of Giden on hand at the begonning and end of the quater wili be June: 34 , 340 tret Setpterter 30 ing feet e. Geden costs $0.60 per foot One hal of a monthis puechases of Glden is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for purchases of caldea durng June wit be $7.790. Required: 1. Cakculate the estimated sales. by monthand in total, for the third quarter 2 Calculate the expected cash collections, by month and in total, tor the thind quartet. 3 Calculate the estanated ouansty of beach umbieliss that need to be produced in July. August. September, and Octaber. 4. Cakculate the quantity of Gilden on feet that needs to be purchased by month and in total, for the third quarter. 5 . Calculate the cost of the iaw material (Giden) peirchases by month and in total, for the thind guater. 6. Catculate the expected cosh dnbursements for taw material (Gidsent) puichases, ty month and n total, for the thild quaree