Crydon, Inc., manufactures an advanced swim fin for scuba divers. Management is
ID: 2374402 • Letter: C
Question
Crydon, Inc., manufactures an advanced swim fin for scuba divers. Management is now preparing detailed budgets for the third quarter, July through September, and has assembled the following information to assist in preparing the budget:
The company maintains finished goods inventories equal to 9% of the following month%u2019s sales. The inventory of finished goods on July 1 will be 540 pairs.
Each pair of swim fins requires 3 pounds of geico compound. To prevent shortages, the company would like the inventory of geico compound on hand at the end of each month to be equal to 20% of the following month%u2019s production needs. The inventory of geico compound on hand on July 1 will be 3,654 pounds.
Geico compound costs $3.50 per pound. Crydon pays for 57% of its purchases in the month of purchase; the remainder is paid for in the following month. The accounts payable balance for geico compound purchases will be $11,300 on July 1.
Prepare a sales budget, by month and in total, for the third quarter.
Prepare a schedule of expected cash collections, by month and in total, for the third quarter. (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations.)
Prepare a direct materials budget for geico compound, by month and in total, for the third quarter. (Do not round intermediate calculations. Round your answers to the nearest dollar amount. Input all amounts as positive values.)
Prepare a schedule of expected cash disbursements for geico compound, by month and in total, for the third quarter. (Do not round intermediate calculations. Round your answers to the nearest dollar amount. Leave no cells blank - be certain to enter "0" wherever required.)
a. The Marketing Department has estimated sales as follows for the remainder of the year (in pairs of swim fins):Explanation / Answer
Crydon Inc
July Aug Sept Oct Nov Dec
FG Sales 6900 7900 5900 4900 3900 3900
End 869 649 539 429 429
Beg -759 -869 -649 -539 -429 -429
Production 7010 7680 5790 4790 3900 3471
3 3 3 3 3 3
DM Mat units used 21030 23040 17370 14370 11700 10413
Mat end 4608 3474 2874 2340 2082.6 0
Mat beg -4206 4608 3474 2874 2340 2082.6
Mat purch 21432 31122 23718 19584 16122.6 12495.6
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