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): July 30,000 August 70,000 September 50,000 October 20,000 November 10,000 December 10,000 The selling price of the beach umbrellas is $12 per unit. 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 Page 400 Sales for June totaled $300,000. 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 72,000 feet September 30 7 feet e. Gilden costs $0.80 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 $76,000. Required: 1. Calculate the estimated sales, by month and in total, for the third quarter (Hint: Refer to Schedule 1 for guidance). 2. Calculate the expected cash collections, by month and in total, for the third quarter (Hint: Refer to Schedule 1 for guidance). 3. Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, September, and October (Hint: Refer to Schedule 2 for guidance). 4. Calculate the quantity of Gilden (in feet) that needs to be purchased by month and in total, for the third quarter (Hint: Refer to Schedule 3 for guidance). 5. Calculate the cost of the raw material (Gilden) purchases by month and in total, for the third quarter (Hint Refer to Schedule 3 for guidance). 6. Calculate the expected cash disbursements for raw material (Gilden) purchases, by month and in total, for the third quarter (Hint: Refer to Schedule 3 for guidance).