Swanson, Inc., manufactures an advanced swim fin for scuba divers. Management is
ID: 2598008 • 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 603 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 5,432 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 $14,000 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
1a. Sales budget
1b. Schedule of expected cash collections
2. Production budget
3a. Direct materials budget
3b. Schedule of expected cash disbursements for geico compound
July Aug Sep Total Unit sales 6700 7700 5700 20100 Selling price $24 $24 $24 $24 Sales $160800 $184800 $136800 $48240Related Questions
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