Prepare a direct materials budget for geico compound by

Assignment Help Accounting Basics

Reference no: EM13568244

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 sales are on account. Based on past experience, sales are expected to be collected in the following pattern:


43%	in the month of sale
48%	in the month following sale
9%	uncollectible

The beginning accounts receivable balance (excluding uncollectible amounts) on July 1 will be $130,000.

c.	The company maintains finished goods inventories equal to 9% of the following month's sales. The inventory of finished goods on July 1 will be 504 pairs.

Each pair of swim fins requires 4 pounds of geico compound. To prevent shortages, 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 July 1 will be 4,552 pounds.

e.	Geico compound costs $2.50 per pound. Crydon pays for 60% of its purchases in the month of purchase; the remainder is paid for in the following month. The accounts payable balance for geico compound purchases will be $11,800 on July 1.

Required:

1a.	Prepare a sales budget, by month and in total, for the third quarter.

	July	August	September	Quarter - Total
Total budgeted sales	$	$	$	$

1b.	Prepare a schedule of expected cash collections, by month and in total, for the third quarter. (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations.)

Schedule of Expected Cash Collections
	July	August	September	Quarter - Total
Accounts receivable, beginning balance	$	$	$	$
July sales
August sales
September sales

Total cash collections	$	$	$	$

2.	Prepare a production budget for each of the months July through October. (Input all amounts as positive values.)

Production Budget
	July	August	September	October
Budgeted sales (pairs)
:

Total needs
:

Required production (pairs)

3a.	Prepare a direct materials budget for geico compound, by month and in total, for the third quarter. (Do not round intermediate calculations. Input all amounts as positive values.)

Direct Materials Budget
	July	August	September	Quarter - Total
Production needs (lbs.)
:

Total needs
:

Raw materials to be purchased

Cost of raw materials to be purchased	$	$	$	$

3b.	Prepare a schedule of expected cash disbursements for geico compound, by month and in total, for the third quarter.(Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required.)

Schedule of Expected Cash Disbursements
	July	August	September	Quarter - Total
Accounts payable, beginning balance	$	$	$	$
July purchases
August purchases
September purchases

Total cash payments	$	$	$	$

Reference no: EM13568244

Questions Cloud

On june 30 the board of directors of sandals inc declares a : on june 30 the board of directors of sandals inc. declares a 2-for-1 stock split on its 30000 3 par common shares. the

Suppose a portfolio consists of four assets the risk : suppose a portfolio consists of four assets. the risk contribution of each asset is as follows uk large cap 3.9 uk

Carters preferred stock pays a dividend of 100 per quarter : carters preferred stock pays a dividend of 1.00 per quarter. if the price of the stock is 45.00 what is its nominal

You are an analyst at bank alpha you were given the task to : you are an analyst at bank alpha. you were given the task to determine whether under basel ii your bank can use the

Prepare a direct materials budget for geico compound by : swanson inc. manufactures an advanced swim fin for scuba divers. management is now preparing detailed budgets for the

The required rate of return is rs 105 and the expected : a stock is expected to pay a dividend of 0.75 at the end of the year.nbspthe required rate of return is rs 10.5 and

Would you expect that a technology firm or a utility firm : would you expect that a technology firm or a utility firm would have a higher priceearnings

A hedge fund is long 315 million in certain stocks and : a hedge fund is long 315 million in certain stocks and short 225 million in other stocks. the hedge funds equity is 185

Your firm hired vikram mehra as an active manager for its : your firm hired vikram mehra as an active manager for its pension fund. his benchmark is the russell 2000 growth index.

User Account

All Pages