Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 $0.80 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.
image text in transcribed

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

Step: 3

blur-text-image

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

Essential Strategies For Financial Services Compliance

Authors: Annie Mills, Peter Haines

2nd Edition

1118906136, 978-1118906132

More Books

Students also viewed these Accounting questions

Question

Create a workflow analysis.

Answered: 1 week ago