The data below pertains to the third quarter of Devon Company which manufactures boys shirts.

Below is the estimated sales (in units):

July	30,000
August	60,000
September	70,000
October	50,000
November	15,000
December	25,000

The selling price of the shirt is $10 per unit.

All sales are on account. Based on past experience, sales are collected in the following pattern:

Month of sale	25%
Month following sale	70%
Uncollectible	5%

Sales for June totaled $400,000.

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.

Each shirt requires 3 pounds of raw materials.

The company requires that the ending inventory of raw materials be equal to 10% of the following month's production needs.

The raw material costs $1.50 per pound.

40% of a month's purchases of raw materials is paid for in the month of the purchase; the remainder is paid for in the following month.

The Accounts Payable on June 30 will be $80,000.

Part I (Similar to Class Example - Problem 8-28)

Required: Prepare:

1-Prepare a sales budget, by month and in total, for the Third quarter. (3 marks)

2-Prepare a schedule of expected cash collections, by month and in total, for the Third quarter. (15 marks)

3-Prepare a production budget for each of the months July, August, September and October. (10 marks)

4-Prepare a direct materials budget, by month and in total, for the Third quarter. (12 marks)

5-Prepare a schedule of expected cash disbursements, by month and in total, for the Third quarter. (15 marks)