Reference no: EM132516749

Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the month of August and has assembled the following information to assist in the budget preparation:

Budgeted sales units are 30,000 (July), 70,000 (August), 50,000 (September) and 20,000 (October)

1. Selling price per unit: $15
2. Cash collections: 40% in the month of sale. 55% in the month following the sale. 5% are uncollectible.
3. The company maintains finished goods inventories equal to 20% of the following month's sales.
4. Each beach umbrella requires 5 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.
5. Raw material cost is $0.80 per foot of Gilden.
6. The beginning balance of raw materials for August will be 134,000 feet of Gilden.
7. 60% of a month's purchases of Gilden is paid for in the month of purchase; the remainder is paid for in the following month.
8. The accounts payable balance on August 1 for purchases of Gilden during July will be $82,400.

Answer the following questions:

Question 1: What is the August sales budget in dollars?

Question 2: How much money will Milo collect during the month of August?

Question 3: How many units should be produced in the month of August?

Question 4: How many feet of raw materials (Gilden) should be purchased in August?

Question 5: What will be the cost of raw materials for the month of August?

Question 6: What will be the cash disbursements in August?