USING EXCEL

Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation:

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

July	31,500	October	21,500
August	73,000	November	8,000
September	42,000	December	8,500

The selling price of the beach umbrellas is $12 per unit.

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

30%	in the month of sale
65%	in the month following sale
5%	uncollectible

Sales for June totaled $264,000.

c.) The company maintains finished goods inventories equal to 15% of the following months 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 months production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be:

June 30	75,450	feet
September 30	?	feet

e.) Gilden costs $0.80 per foot. One-half of a months purchases of Gilden is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $48,920.

1. Calculate the estimated sales, by month and in total, for the third quarter.

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.

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.

6. Calculate the expected cash disbursements for raw material (Gilden) purchases, by month and in total, for the third quarter.

Sales Budget \begin{tabular}{|l|l|l|l|l|l|} \hline \multicolumn{2}{|c|}{ Cash Collections Budget } \\ \hline & April & May & June & Quarter \\ \hline Accounts Receivable 3/31 & & & \\ \hline April Sales & & & & \\ \hline & & & & \\ \hline May Sales & & & \\ \hline \end{tabular} Direct Materials Budget Required Production Materials per unit (pounds) Production needs Add: Desired Ending Inventory Total materials needed Less: Beginning materials inventory Required Purchases Cost per pound Cost of Purchases Cash Disbursements for Materials Budget Accounts Payable 3/31 April purchases May purchases June purchases Total cash disbursements Direct Labor Budget \begin{tabular}{|l|l|l|l|l|} \hline & \multicolumn{2}{|c|}{ Direct Labor Budget } \\ \hline & April & May & June & Quarter \\ \hline Units of production & & & \\ \hline \end{tabular} Direct labor time per unit Labor hours required Hourly wage rate Total direct labor costs Manufacturing Overhead Budget Budgeted DLH Variable POR Variable MOH Fixed MOH Total MOH Less: noncash costs Cash disbursements for MOH POR = \begin{tabular}{l|l|l|l|l|l|} \hline \multicolumn{3}{l|}{ Ending Finished Goods Inventory Budget } \\ \hline Production Costs per unit & Quantity & Cost & Total \\ \hline DM & & & \\ \hline DL & & \\ \hline MOH & & \\ \hline Budgeted unit cost & & \\ \hline Ending inventory in units & & \\ \hline Budgeted unit cost & & \\ \hline Ending finished goods inventory & & \\ \hline \end{tabular} Selling and Admin Expense Budget Budgeted Sales Variable S\&A rate Variable expenses Fixed S\&A Total S\&A Less: noncash S\& Acosts Cash disbursements for S\&A