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Sales & Production Budgets: Garrick Company manufactures face masks. The company is preparing detailed budgets for the third quarter and has assembled the following information
Sales & Production Budgets: Garrick Company manufactures face masks. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation: The Marketing Department has estimated sales as follows for the remainder of the year (in units): The selling price of the face masks is $12 per unit. All sales are on account. Based on past experience, sales are collected in the following pattern: 28% in the month of sale, 67% in the month following sale and 5% uncollectible. Sales for June totaled $600,000. The company maintains finished goods inventories equal to 20% of the following month's sales. This requirement will be met at the end of June. Required: Prepare a sales budget, by month and in total, for the third quarter. (Show your budget in both units and dollars.) Also prepare a schedule of expected cash collections, by month and in total, for the third quarter. Prepare a production budget for each of the months July-October
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