a. The Marketing Department has estimated sales as follows for the remainder of the year (In units):
July
August
September
34,500 October
79,000 November
48,000 December
24,500
11,000
11,500
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 $336,000.
c. The company maintains finished goods Inventories equal to 15% of the following month's 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 month's production needs. The Inventory of Gilden on hand at the
beginning and end of the quarter will be:
June 30
September 30
82,350 feet
? feet
e. Gilden costs $0.80 per foot. One-half of a month's 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 $56,120
Required:
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
Complete this question by entering your answers in the tabs below.
Rag 1
Reg 2
Req 3
Reg 4 and 5
Req 6
