Crydon, Inc., manufactures an advanced swim fin for scubadivers. Management is now preparing detailed budgets for the thirdquarter, July through September, and has assembled the followinginformation to assist in preparing the budget:
a. The Marketing Department hasestimated sales as follows for the remainder of the year (in pairsof swim fins):
The selling price of the swimfins is $15 per pair.
July 5,200 October 3,200 August 6,200 November 2,200 September 4,200 December 2,200
b. All sales are on account. Basedon past experience, sales are expected to be collected in thefollowing pattern:
44% in the month ofsale 47% in the monthfollowing sale 9% uncollectible
The beginning accountsreceivable balance (excluding uncollectible amounts) on July 1 willbe $134,000.
c. The company maintains finished goods inventories equal to 12% ofthe following monthâs sales. The inventory of finished goods onJuly 1 will be 624 pairs.
d. Each pair of swim fins requires 5 pounds of geico compound. Toprevent shortages, the company would like the inventory of geicocompound on hand at the end of each month to be equal to 20% of thefollowing monthâs production needs. The inventory of geico compoundon hand on July 1 will be 5,320 pounds.
e. Geico compound costs $3.00 per pound. Crydon pays for 59% of itspurchases in the month of purchase; the remainder is paid for inthe following month. The accounts payable balance for geicocompound purchases will be $11,100 on July 1.
Required:
1a. Prepare a sales budget, by month and in total, for the thirdquarter.
July august september quarter
budgeted sales(pair)
Selling price per pair
total budgeted sales
1b. Prepare a schedule of expected cash collections, by month and intotal, for the third quarter.
Accounts receivable, beginning balance
July sales
August sales
September sales
Total cash collections
2. Prepare a production budget for each of the months July throughOctober.
July august september octomber
budgeted sales (pairs)
total needed
required productions
3a. Prepare a direct materials budget for geico compound, by monthand in total, for the third quarter. (Do not roundintermediate calculations.)
July august september quarter
required production pairs
raw material needed per pair
productions needs
total needs
raw material to be purchased
cost of raw material to be pur
3b. Prepare a schedule of expected cash disbursements for geicocompound, by month and in total, for the third quarter. (Donot round intermediate calculations.)
July ausust september quarter
accounts payable, beginning balance
july purchases
august purchases
september purchases
total cash disburments
Crydon, Inc., manufactures an advanced swim fin for scubadivers. Management is now preparing detailed budgets for the thirdquarter, July through September, and has assembled the followinginformation to assist in preparing the budget: |
| a. | The Marketing Department hasestimated sales as follows for the remainder of the year (in pairsof swim fins): |
| The selling price of the swimfins is $15 per pair. |
| July | 5,200 | October | 3,200 |
| August | 6,200 | November | 2,200 |
| September | 4,200 | December | 2,200 |
| b. | All sales are on account. Basedon past experience, sales are expected to be collected in thefollowing pattern: |
| 44% | in the month ofsale |
| 47% | in the monthfollowing sale |
| 9% | uncollectible |
| The beginning accountsreceivable balance (excluding uncollectible amounts) on July 1 willbe $134,000. |
| c. | The company maintains finished goods inventories equal to 12% ofthe following monthâs sales. The inventory of finished goods onJuly 1 will be 624 pairs. |
| d. | Each pair of swim fins requires 5 pounds of geico compound. Toprevent shortages, the company would like the inventory of geicocompound on hand at the end of each month to be equal to 20% of thefollowing monthâs production needs. The inventory of geico compoundon hand on July 1 will be 5,320 pounds. |
| e. | Geico compound costs $3.00 per pound. Crydon pays for 59% of itspurchases in the month of purchase; the remainder is paid for inthe following month. The accounts payable balance for geicocompound purchases will be $11,100 on July 1. |
| Required: |
| 1a. | Prepare a sales budget, by month and in total, for the thirdquarter. July august september quarter budgeted sales(pair) Selling price per pair total budgeted sales |
| 1b. | Prepare a schedule of expected cash collections, by month and intotal, for the third quarter. |
Accounts receivable, beginning balance
July sales
August sales
September sales
Total cash collections
| 2. | Prepare a production budget for each of the months July throughOctober. July august september octomber budgeted sales (pairs) total needed required productions |
| 3a. | Prepare a direct materials budget for geico compound, by monthand in total, for the third quarter. (Do not roundintermediate calculations.) July august september quarter |
| required production pairs raw material needed per pair productions needs total needs raw material to be purchased cost of raw material to be pur |
| 3b. | Prepare a schedule of expected cash disbursements for geicocompound, by month and in total, for the third quarter. (Donot round intermediate calculations.) July ausust september quarter |
accounts payable, beginning balance
july purchases
august purchases
september purchases
total cash disburments
Related questions
Crydon, Inc., manufactures an advanced swim fin for scubadivers. Management is now preparing detailed budgets for the thirdquarter, July through September, and has assembled the followinginformation to assist in preparing the budget: |
| a. | The Marketing Department hasestimated sales as follows for the remainder of the year (in pairsof swim fins): |
| The selling price of the swimfins is $15 per pair. |
| July | 5,200 | October | 3,200 |
| August | 6,200 | November | 2,200 |
| September | 4,200 | December | 2,200 |
| b. | All sales are on account. Basedon past experience, sales are expected to be collected in thefollowing pattern: |
| 44% | in the month ofsale |
| 47% | in the monthfollowing sale |
| 9% | uncollectible |
| The beginning accountsreceivable balance (excluding uncollectible amounts) on July 1 willbe $134,000. |
| c. | The company maintains finished goods inventories equal to 12% ofthe following monthâs sales. The inventory of finished goods onJuly 1 will be 624 pairs. |
| d. | Each pair of swim fins requires 5 pounds of geico compound. Toprevent shortages, the company would like the inventory of geicocompound on hand at the end of each month to be equal to 20% of thefollowing monthâs production needs. The inventory of geico compoundon hand on July 1 will be 5,320 pounds. |
| e. | Geico compound costs $3.00 per pound. Crydon pays for 59% of itspurchases in the month of purchase; the remainder is paid for inthe following month. The accounts payable balance for geicocompound purchases will be $11,100 on July 1. |
| Required: |
| 1a. | Prepare a sales budget, by month and in total, for the thirdquarter. |
| 1b. | Prepare a schedule of expected cash collections, by month and intotal, for the third quarter. |
| 2. | Prepare a production budget foreach of the months July through October. |
| 3a. | Prepare a direct materials budget for geico compound, by monthand in total, for the third quarter. (Do not roundintermediate calculations.) |
| 3b. | Prepare a schedule of expected cash disbursements for geicocompound, by month and in total, for the third quarter. (Donot round intermediate calculations.) |
| Good evening, Your timely asstance on this problem is greatlyapprecieated. Crydon, Inc., manufactures an advanced swim fin for scubadivers. Management is now preparing detailed budgets for the thirdquarter, July through September, and has assembled the followinginformation to assist in preparing the budget: |
| a. | The Marketing Department hasestimated sales as follows for the remainder of the year (in pairsof swim fins): |
| The selling price of the swimfins is $10 per pair. |
| July | 5,100 | October | 3,100 |
| August | 6,100 | November | 2,100 |
| September | 4,100 | December | 2,100 |
| b. | All sales are on account. Basedon past experience, sales are expected to be collected in thefollowing pattern: |
| 43% | in the month ofsale |
| 48% | in the monthfollowing sale |
| 9% | uncollectible |
| The beginning accountsreceivable balance (excluding uncollectible amounts) on July 1 willbe $132,000. |
| c. | The company maintains finished goods inventories equal to 9% ofthe following monthâs sales. The inventory of finished goods onJuly 1 will be 459 pairs. |
| d. | Each pair of swim fins requires 3 pounds of geico compound. Toprevent shortages, the company would like the inventory of geicocompound on hand at the end of each month to be equal to 20% of thefollowing monthâs production needs. The inventory of geico compoundon hand on July 1 will be 3,114 pounds. |
| e. | Geico compound costs $2.50 per pound. Crydon pays for 57% of itspurchases in the month of purchase; the remainder is paid for inthe following month. The accounts payable balance for geicocompound purchases will be $11,300 on July 1. |
