Reference no: EM133402296
A. The Marketing Department has estimated sales as follows for the remainder of the year (in units):
July 35,000 August 75,000 September 55,000 October 25,000 November 15,000 December 15,000
The selling price of the chargers is $15 each.
B. All sales are on account. Based on past experience, sales are expected to be collected in the following pattern: 15% in the month of sale 78% in the month following sale 7% uncollectible Sales for June were $345,000
C. The company maintains finished goods inventories equal to 10% of the following month's sales. This requirement will be met at the end of June.
D. Each phone charger requires 2 metres of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires that the ending inventory of Gilden be equal to 45% of the following month's production needs. The inventory of Gilden on hand at the beginning of the quarter is 20,000 metres.
E. Gilden costs $3.40 per metre. 50% 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 $ 75,000
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 phone chargers that need to be produced in July, August, September, and October.
4. Calculate the quantity of Gilden (in metres) 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 thirhir quarter.