Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(Sales, Production, and Direct Materials Budgets) Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter. Use the following information

image text in transcribed
image text in transcribed
image text in transcribed
(Sales, Production, and Direct Materials Budgets) Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter. Use the following information to assist in the budget preparation: a. The Marketing Dept estimates sales as follows for the remainder of the year (in units): The selling price of the beach umbrellas is $12 per unit. b. All sales are on account (AR not cash). Sales are collected in the following pattern: 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: e. Gilden costs $0.80 per foot. One-half of a month's purchases of Gilden is paid for in the month of purchase (50s); the remainder is pald for in the following month ( 506). The accounts payable on July 1 for purchases of Gilden during June will be $76,000. 1. Calculate the estimated sales, by month and in total, for the third quarter. The estimated sales for the third nuartor 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. The production budget (quantity of beach umbrellas) for July-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. and 5: The direct materials budget for the third quarter: 6. Calculate the expected cash disbursements for raw material (Gilden) purchases, by month and in total, for the third quarter

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Expert Systems And Artificial Intelligence In Internal Auditing

Authors: Daniel E. O'Leary, Paul R. Watkins

1st Edition

1558760865, 978-1558760868

More Books

Students also viewed these Accounting questions

Question

Find the rank and nullity of the matrix 1 2 1] A 1 3 2 0 4

Answered: 1 week ago

Question

Describe ERP and how it can create efficiency within a business

Answered: 1 week ago