Problem 8-30 Integration of the Sales, Production, and Direct Materials Budgets (L08-2, LO8-3, L08-4) Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and hes 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 42,000 aquet 94,000 September 63.000 October 32,000 November 10,500 December 19,000 The selling price of the beach umbrellas is $15 per unit. b. All sales are on account. Based on past experience, sales are collected in the following pattern 30 in the south of sala 65 in the month following we Sungollectible Sales for June totaled 5645,000 The comparw maintains finished goods inventores equal to 15% of the following month's sales. This requirement will be met at the Sales for June totaled $645,000. 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 Gliden, 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 September 30 99,600 feet 7 teet 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 pald for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be 574,120. $74,120. 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 (Gliden) 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. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Req 4 and 5 Req 6 Calculate the estimated sales, by month and in total, for the third quarter. Budgeted sales July August September Quarter $ 630,000 $ 1.410,000 $ 945,000 $ 2,995,000 Reg 2 > Req 1 Reg 2 Reg 3 Reg 4 and 5 Reg 6 Calculate the expected cash collections, by month and in total, for the third quarter. Quarter Total cash collections July August September $ 608,250 $ 832,500 $ 1,200,000 $ 2,640,750 Reg 1 Reg 2 Reg 3 Req 4 and 5 Reg 6 Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, September, and October July August September October Required production in units Reg 1 Req 2 Reg 3 Req 4 and 5 Req 6 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. (Round your Unit cost of raw materials to 2 decimal places.) July August September Quarter Total units of raw materials to be purchased Cost of raw materials to be purchased LIS ing your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 and 5 Reg 6 Calculate the expected cash disbursements for raw material (Gilden) purchases, by month and in total, for the third quarter. July August September Quarter Total cash disbursements Req 4 and 5
