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 $$14$ per unit.

b$.$ All sales are on account $($i$.$e$.,$ on credit$)$ and sales for June totaled $$588,000.$ Based on past experience, sales are collected in the

following pattern:

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 $30$

$98,450$ feet

September $30$

feet

e$.$ Gilden costs $$0\mathrm{.}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 in the following month. The accounts payable on July $1$ for purchases of Gilden during June will be $$72,920.($I$.$e$.,$ this is the

amount of June Gliden purchases that have not been paid for at the end of June.$)$

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.