el Milo Company third quarter and has as manufactures beach umbrellas. The compa
ID: 2403434 • Letter: E
Question
el Milo Company third quarter and has as manufactures beach umbrellas. The company is preparing detailed bodgets for the sembled the following information to assist in the bodjget peeparation a has estimated sales as follows for the remainder of the year (in units) a The Marketing Department esti 30,000 October 70,000 November 50,000 December 20,000 10,000 August 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 pamern 30% inthe month of sale 65% in the month folowing sale 5% uncollectible Sales for June totaled $300,000 The company maintains finished goods mentores equal 1 15%of the following month's sales. This requirement will be met at the end of June. Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires that following month's production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be: c. d. y the ending inventory of Gilden be equal to 505% of the 000 feet June 30 . September 30 Gilden costs $0.80 per foot. One-half of a month's purchases of Gilden is paid for in the moeth of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for parchases of Gilden daring June will be $76,000 e. Required 1. Prepare a sales hedget, by mibeth and in tdbl, fer the third quarter t. (Show your budget in both units and dollars.) Also prepare a schedule of expocted cash collections, by month and in total, for the third quarter . Prepare a production budget for each ofb.tonas ialy-October. 3. Prepare a direct materials budget for Gilden, by month and in total, for the third quarter. Also prepare a schedule of expected cash disbursenuents for Gilden, by month and in total, for the third quarter.Explanation / Answer
Milo Company Sales July 30000 August 70000 September 50000 October 20000 November 10000 December 10000 June Sales $ 3,00,000.00 Milo Company Sales Budget July August September Quarter Budgeted unit Sales 30000 70000 50000 150000 Selling Price per unit $ 12.00 $ 12.00 $ 12.00 $ 12.00 Budgeted Sales $ 3,60,000.00 $ 8,40,000.00 $ 6,00,000.00 $ 18,00,000.00 Milo Company Schedule of Expected Cash collection July August September Quarter Accounts receivable June 30th($300000*65%) $ 1,95,000.00 $ 1,95,000.00 July Sales($360000*30%) in July,($360000*65%) in Aug $ 1,08,000.00 $ 2,34,000.00 $ 3,42,000.00 August Sales($840000*30%) in Aug,($840000*65%) in Sep $ 2,52,000.00 $ 5,46,000.00 $ 7,98,000.00 September Sales($600000*30%) in Sep,($600000*65%) in Oct $ 1,80,000.00 $ 1,80,000.00 Total Cash Collectons $ 3,03,000.00 $ 4,86,000.00 $ 7,26,000.00 $ 15,15,000.00 Milo Company Production Budget July August September Quarter Budgeted Unit sales 30000 70000 50000 150000 Ending Goods Inventory($70000*15%) in July,($50000*15%) in Aug,(20000*15%) in Sept 10500 7500 3000 3000 Total Needs 40500 77500 53000 153000 Beginning Goods Inventory 4500 10500 7500 4500 Required Production 36000 67000 45500 148500 Milo Company Direct Material Budget July August September Quarter Required Production 36000 67000 45500 148500 Gilden per unit(Feet) 4 4 4 4 Production needed 144000 268000 182000 594000 Ending Inventory(268000*50%) in July,(182000*50%) in Aug,(18500*4*50%) in Sep 134000 91000 37000 37000 Total needed 278000 359000 219000 631000 Beginning Inventory 96150 134000 91000 96150 Material Needed 181850 225000 128000 534850 Cost Per feet $ 0.80 $ 0.80 $ 0.80 $ 0.80 Total material cost $ 1,45,480.00 $ 1,80,000.00 $ 1,02,400.00 $ 4,27,880.00 Working October Required Production Budgeted unit sales 20000 Ending goods Inventory(10000*15%) 1500 Total Need 21500 Beginning Inventory 3000 Required Production 18500 Milo Company Schedule of Expected Cash disbursement July August September Quarter Accounts Payable,June 30th $ 76,000.00 $ 76,000.00 July Purchases($145480)*1/2 in July and 1/2 in Aug $ 72,740.00 $ 72,740.00 $ 1,45,480.00 August Purchases($180000)*1/2 in August and 1/2 in Sept $ 90,000.00 $ 90,000.00 $ 1,80,000.00 September Purchases($102000*1/2) in Sep $ 51,200.00 $ 51,200.00 Total Cash Disbursements $ 1,48,740.00 $ 1,62,740.00 $ 1,41,200.00 $ 4,52,680.00
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