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 $12 per unit.

July	30,000	October	20,000
August	70,000	November	10,000
September	50,000	December	10,000

b.	All sales are on account. Based on past experience, sales are collected in the following pattern:

30%	in the month of sale
65%	in the month following sale
5%	uncollectible

Sales for June totaled $300,000.

c.	The company maintains finished goods inventories equal to 15% of the following months 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 months production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be:

June 30	72,000	feet
September 30	?	feet

e.	Gilden costs $0.80 per foot. One-half of a months 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 $76,000.

QUESTIONS:

1A) Prepare a sales budget, by month and in total, for the third quarter.

	july	august	september	quarter
budgeted sales units
selling price per unit
budgeted sales

1B) Prepare a schedule of expected cash collections, by month and in total, for the third quarter.

	july	august	september	quarter
accounts receivable june 30
july sales
august sales
september sales
total cash collections

2) Prepare a production budget for each of the months JulyOctober.

	july	august	september	october
budgeted unit sales
(pick add/minus ending/beginning inventory)
Total needs
(pick add/minus ending/beginning inventory)
Required production in units

3a) Prepare a direct materials budget for Gilden,, by month and in total, for the third quarter. (Round your Unit cost of raw materials to 2 decimal places.)

3b) Prepare a schedule of expected cash disbursements for Gilden,, by month and in total, for the third quarter

3B CHART	JULY	AUGUST	SEPTEMBER	QUARTERLY
Accounts payable, June 30
july purchases
august purchases
september purchases
total cash disburstments

PLEASE EXPLAIN HOW YOU GET THE ANSWERS

3A CHART	july	september	october	quarter
required production in units of finished goods
units of raw materials needed in finished goods
units of raw materials needed to finish production
(pick add/minus beginning/ending raw materials inventory)
total units of raw materials needed
(pick add/minus beginning/ending raw materials inventory)
units of raw materials to be purchased
unit cost of raw materials
cost of raw materials to be purchased