Swanson, Inc., manufactures an advanced swim fin for scuba divers. Management is
ID: 2548818 • Letter: S
Question
Swanson, 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’s sales. The inventory of finished goods on July 1 will be 540 pairs.
Each pair of swim fins requires 4 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’s production needs. The inventory of geico compound on hand on July 1 will be 4,872 pounds.
Geico compound costs $2.50 per pound. Crydon pays for 60% 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 $12,600 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. (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.)
Prepare a schedule of expected cash disbursements for geico compound, by month and in total, for the third quarter. (Do not round intermediate calculations.)
Swanson, 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:
Explanation / Answer
SALES BUDGET JULY AUG SEP QUARTER OCT NOV Budgeted Sales units 6,000 7,000 5,000 18,000 4,000 3,000 Selling price per unit 17 17 17 17 17 17 Total Sales 102,000 119,000 85,000 306,000 68,000 51,000 EXPECTED CASH COLLECTIONS JULY AUG SEP QUARTER Beginning Recievables 142,000 142,000 July sales 43,860 48960 92,820 Aug sales 51170 57120 108,290 Sep Sales 36,550 36,550 Total Cash Collections 185,860 100,130 93,670 379,660 PRODUCTION BUDGET JULY AUG SEP QUARTER OCT NOV Budgeted Sales Units 6,000 7,000 5,000 18,000 4,000 3,000 Add: Desired Ending Finished inventory 630 450 360 360 270 Total Needs 6,630 7,450 5,360 18,360 4,270 Less: Beginning Finished Inventory 540 630 450 540 360 Required Production in units 6,090 6,820 4,910 17,820 3,910 RAW MATERIAL PURCHASE BUDGET JULY AUG SEP QUARTER OCT NOV Budgeted Production units 6,090 6,820 4,910 17,820 3,910 Material Required per unit 4 4 4 4 4 Total production requirement 24,360 27,280 19,640 71,280 15,640 Add: Desired Ending Inventory 5,456 3,928 3,128 3,128 Total needs 29,816 31,208 22,768 74,408 Less: Beginning Inventory 4,872 5,456 3,928 4,872 Purchase Units 24,944 25,752 18,840 69,536 Cost price per unit 2.50 2.50 2.50 2.50 Budgeted Purchase in $ 62,360 64,380 47,100 173,840 EXPECTED CASH PAYMENTS JULY AUG SEP QUARTER Beginning Accounts payable 12,600 12,600 July month purchase 37416 24944 62,360 Aug month purchasse 38628 25752 64,380 Sep month purchasse 28260 28,260 Total Cash disbursement 50,016 63,572 54,012 167,600
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.