Mia Company manufactures beach umbrellas. The company is now 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 $$12$ per unit. Sales in June were $45,000$ units.

b$.$ All sales are on account. On the basis of past experience, sales are collected in the following pattern:

in the month of sale

in the month following sale

uncollectible

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 $4$ metres of Gilden, a material that is sometimes hard to get. Therefore, the company requires that the

inventory of Gilden on hand at the end of each month 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 as follows:

June $30,112,000$ metres

September $30,?$ metres

e$.$ Gilden costs $$0\mathrm{.}80$ per metre. One$-$half of a month's purchases of Gilden are paid for in the month of purchase; the remainder are

paid for in the following month. The accounts payable on July $1$ for purchases of Gilden during June will be $$96,000.$

Required:

Prepare a sales budget, by month and in total, for the third quarter. Also, prepare a schedule of expected cash collections, by month and in total, for the third quarter.

$\backslash$table$[[$Mia Company,,$],[,$Sales Budget,,,$],[,$July,August,September,Quarter$],[$Budgeted sales,,,,$]]$

$\backslash$table$[[$Mia Company$],[$Schedule of Expected Cash Collections$],[,$July,August,September,Quarter$],[$Accounts receivable, June $30],[$July sales$],[$August sales$],[$September sales$],[$Total cash collections,$$,$$$,$$$,$$

Dimsum Products Limited of Nanjing, China, manufactures and distributes toys throughout Southeast Asia.

Three cubic centimetres $($cc$)$ of solvent S$27$ are required to manufacture each unit of Fineclay, one of the company's products. The company is now planning raw materials needs for the third quarter, the quarter in which peak sales of Fineclay occur. To keep production and sales moving smoothly, the company has the following inventory requirements:

a$.$ The finished goods inventory on hand at the end of each month must be equal to $4,200$ units of Fineclay plus $15\%$ of the next month's sales. The finished goods inventory on June $30$ is budgeted to be $14,000$ units.

b$.$ The raw materials inventory on hand at the end of each month must be equal to one$-$half of the following month's production needs for raw materials. The raw materials inventory on June $30$ is budgeted to be $75,600$ cc of solvent S$27.$

c$.$ The company maintains no work$-$in$-$process inventories.

A sales budget for Fineclay for the last six months of the year follows:

$\backslash$table$[[,\backslash$table$[[$Budgeted Sales$],[$in Units$]]],[$July$,49,000],[$August$,56,000],[$September$,70,000],[$October$,42,000],[$November$,28,000],[$December$,14,000]]$

Required:

Prepare a production budget for Fineclay for the months of July to October.

Dimsum Products Limited