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.
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. |