The Milo Company manufactures furniture. The company has budgeted sales of wooden desks as follows:

	April	May	June	July
Budgeted Unit Sales	6,500	8,000	10,000	9,000

5 planks are required for each desk. The cost of the plank is $15 per plank.

Selling Price per unit = $200 per desk

Beginning accounts receivable on May 1 = $97,500

Beginning accounts payable on May 1= $292,500

Firm wants 25% of next month's budged sales in FG inventory

Firm wants 20% of next month's total RM needs in RM inventory

Cash Collections

Assume 25% of sales are cash and 75% are credit

Firm will collect 90% of credit sales in the month of sale

Firm will collect 10% of credit sales in the first month after sale

Cash Disbursements

Firm purchases raw materials on account.

Firm will pay 50% of all DM purchases in the month of purchase and 50% in the following month.

(1) Sales Budget
	May	June
Budgeted sales (units)
x Selling price
Total sales amount (dollar)

Schedule of Expected Cash Collection
	May	June
Beginning accounts receivable
May Sales
June Sales
Total cash collections

(2) Production Budget
	May	June
Budgeted sales (units)
+Desired Ending Inventory of FG
Total needed
-Beg. Inventory of FG
Units to be produced

(3) DM Budget
	May	June
Units to be produced	8,000	10,000
RM needed per unit	5	5
RM needed in production	40k	50k
+Desired Ending Inventory of RM		9,250 (Given)
Total RM needed
-Beg. Inventory of RM
RM to be purchased
x Costs of RM per plank	15	15
Total RM costs

Schedule of Expected Cash Disbursements for Purchases of Materials
	May	June
Beginning accounts payable
May Purchases
June Purchases
Total cash disbursements for materials

(8) Cash Budget for June
Beg. Cash Balance	$60,000 (Given)
Add: Cash receipts (collections from customers)
Total cash available
Less: Cash disbursements
Payments to suppliers for raw materials
Selling and Administrative expenses
Purchases of equipment
Excess (deficiency) of cash available over disbursements
Financing:
Borrowings
- Repayments
- Interest
Total financing
Ending Cash Balance