Question

In: Accounting

Omar Inc. manufactures an advanced swim fin for scurba divers. Management is now preparing detailed budgets...

Omar Inc. manufactures an advanced swim fin for scurba 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 marketing department has estimated sales in units as follows for the remainder of the year. June 6,500 July 5,400 August 7,200 September 4,600 October 3,800

1. The selling price of the swim fins is $35 per pair.

2. All sales are on account. Based on the experience, the company has learned that 40% of a month’s of sales are collected in the month of sale, another 50% are collected in the month following sale, and the remaining 10% are collected in the second month of sale. May sales totaled $ 105,000 and June Sales $227,500.

3. The finished goods inventory on hand at the end of each month must be equal to 15% of the next month’s sales. The finished goods inventory on hand in June 30, is budgeted to be $810. 4. Each pair of swim fins requires 3 pounds of geico compound. 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 June 30 is budgeted to be 3,402 pounds and inventory on hand on September 30 is budgeted to be 2,280 pounds.

5. Geico compound costs $0.40 per pound. You are required to prepare the following budgets using the information given in the question below to answers the questions

1. Budgeted sales in Dollars

2. Schedule of Expected cash collection

3. Production Budget

4. Direct Material Budget You are required to add the following information:

1. What is the sale for the third quarter?

2. What is the amount of account receivables?

3. What is the total cash collection for the third quarter?

4. What is the ending inventory on September 30?

5. What is the total units of production for quarter?

6. What is the total Raw material purchased for the quarter?

7. What is the total cost of Raw material for the third quarter?

Solutions

Expert Solution

Budget for the Third Quarter July-Sept
1 Budget Sales In Dollar
Particulars July August September
Sales in Units 5400 7200 4600
Selling Price P.pair 35 35 35
Salesin Dollar 94500 126000 80500
2 Expected Cash Collection
Particulars July August September
SALes 94500 126000 80500
40% Same month 37800 50400 32200
50% Following month 47250 63000
10% in Second Month 9450
Total 132300 223650 185150
3 Production Budget
Particulars July August September
Opening Stock 810 1080 690
Sale 5400 7200 4600
Closing Stock 1080 690 570
Production 5670 6810 4480
4 Direct Material Budget
Particulars July August September
Opening Stock 3402 4426.5 2912
Sale 8100 10800 6900
Closing Stock 4426.5 2912 2280
Purchase 9124.5 9285.5 6268
1 Sales of the Third Quarter
Particulars July August September Total
Sales of the Third Quarter 94500 126000 80500 301000
2 Amount Receivable Amount
For August 10% 12600
For September 60% 48300
60900
3 Total Cash Collection For Third Quarter
Particulars July August September
SALes 94500 126000 80500
40% Same month 37800 50400 32200
50% Following month 47250 63000
10% in Second Month 9450
June month 50%&10% 113750 22750
May month 10% 10500
Total 256550 246400 185150
4 Ending Inventory of FG 570 Units
5 Total Unit of Production July August September Total
Production 5670 6810 4480 16960
6 Raw Material Purchase For the Quarter
Opening Stock 3402
Utilise 25800
Closing Stock 2280
ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Swanson, Inc., manufactures an advanced swim fin for scuba divers. Management is now preparing detailed budgets...
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: a. The Marketing Department has estimated sales as follows for the remainder of the year (in pairs of swim fins). The selling price of the swim fins is $13 per pair.   July 5,600   October 3,600   August 6,600   November 2,600   September 4,600   December 2,600 b. All...
Swanson, Inc., manufactures an advanced swim fin for scuba divers. Management is now preparing detailed budgets...
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: a. The Marketing Department has estimated sales as follows for the remainder of the year (in pairs of swim fins). The selling price of the swim fins is $17 per pair.   July 6,000   October 4,000   August 7,000   November 3,000   September 5,000   December 3,000 b. All...
Swanson, Inc., manufactures an advanced swim fin for scuba divers. Management is now preparing detailed budgets...
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: a. The Marketing Department has estimated sales as follows for the remainder of the year (in pairs of swim fins). The selling price of the swim fins is $21 per pair. July 6,400 October 4,400   August 7,400 November 3,400   September 5,400 December 3,400   b. All...
Star Company manufactures swimming equipment used by divers. Management is now preparing detailed budget for July...
Star Company manufactures swimming equipment used by divers. Management is now preparing detailed budget for July and August, and has assembled the following information to assist in preparing the budget. (a) The Marketing Department has estimated sales as follows for the reminder of the year. The selling price of the equipment is $50 per unit. All sales are on account. July (Projected) 6,000 units August (Projected) 7,000 units September (Projected) 5,000 units October (Projected) 4,000 units (b) All sales are...
Milo Company manufactures beach umbrellas. The company is now preparing detailed budgets for the third quarter...
Milo Company manufactures beach umbrellas. The company is now preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation: a. The Marketing Department has estimated sales as follows for the remainder of the year (in units):   July 37,000   October 27,000   August 77,000   November 17,000   September 57,000   December 17,000 The selling price of the beach umbrellas is $10 per unit. Sales in June were 32,000 units. b. All sales are on account....
Milo Company manufactures beach umbrellas. The company is now preparing detailed budgets for the third quarter...
Milo Company manufactures beach umbrellas. The company is now preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation: a. The Marketing Department has estimated sales as follows for the remainder of the year (in units):   July 46,000   October 36,000   August 86,000   November 26,000   September 66,000   December 26,000 The selling price of the beach umbrellas is $12 per unit. Sales in June were 41,000 units. b. All sales are on account....
Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter an...
Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation a. The Marketing Department has estimated sales as follows for the remainder of the year (in units): 21,000 7,500 8,000 31,000 72,ee8 41,000 October July August September November December The selling price of the beach umbrellas is $11 per unit b. All sales are on account. Based on past experience, sales are collected In the following pattern: 38%...
Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and...
Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation: The Marketing Department has estimated sales as follows for the remainder of the year (in units): July 33,000 October 23,000 August 76,000 November 9,500 September 45,000 December 10,000 The selling price of the beach umbrellas is $15 per unit. All sales are on account. Based on past experience, sales are collected in the...
Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and...
Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation: The Marketing Department has estimated sales as follows for the remainder of the year (in units): July 34,000 October 24,000 August 78,000 November 10,500 September 47,000 December 11,000 The selling price of the beach umbrellas is $11 per unit. All sales are on account. Based on past experience, sales are collected in the...
Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and...
Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation:      a. The Marketing Department has estimated sales as follows for the remainder of the year (in units): The selling price of the beach umbrellas is $14 per unit.      July 38,500   October 28,500   August 87,000   November 15,000   September 56,000   December 15,500    b. All sales are on account. Based on past experience,...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT