Question

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?

Answer 1

	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 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. 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