Q1. Milo 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:

1. The Marketing Department has estimated sales as follows for the remainder of the year (in units):

July		35,000		October		25,000
August		75,000		November		15,000
September		55,000		December		15,000

The selling price of the beach umbrellas is $10 per unit. Sales in June were 30,000 units.

1. All sales are on account. On the basis of past experience, sales are collected in the following pattern:

40	%	in the month of sale
55	%	in the month following sale
5	%	uncollectible

1. The company maintains finished goods inventories equal to 15% of the following months sales. This requirement will be met at the end of June.
2. 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 months production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be as follows:

June 30	82,000	metres
September 30	?	metres

1. Gilden costs $0.80 per metre. One-half of a months 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 $81,000.

Required: 1. Prepare a sales budget, by month and in total, for the third quarter. Also, prepare a schedule of expected cash collections, by month and in total, for the third quarter. 2. Prepare a production budget for each of the months July to October. 3. Prepare a materials purchases budget for Gilden, by month and in total, for the third quarter. Also, prepare a schedule of expected cash payments for Gilden, by month and in total, for the third quarter.