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) Selling price per unit: $15 Cash collections: 40% in the month of sale. 55% in the month following the sale. 5% are uncollectible. The company maintains finished goods inventories equal to 20% of the following month's sales. 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 (number of units that should be produced next month) Raw material cost is $O.80 per foot of Gilden. The beginning balance of raw materials for August will be 134,000 feet of Gilden. 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. The accounts payable balance on August 1 for purchases of Gilden during July will be $82,400 1. What is the August sales budget in dollars? 2. How much money will Milo collect during the month of August? 3. How many units should be produced in the month of August?
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) Selling price per unit: $15 Cash collections: 40% in the month of sale. 55% in the month following the sale. 5% are uncollectible. The company maintains finished goods inventories equal to 20% of the following month's sales. 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 (number of units that should be produced next month) Raw material cost is $O.80 per foot of Gilden. The beginning balance of raw materials for August will be 134,000 feet of Gilden. 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. The accounts payable balance on August 1 for purchases of Gilden during July will be $82,400 1. What is the August sales budget in dollars? 2. How much money will Milo collect during the month of August? 3. How many units should be produced in the month of August?
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 72P: Cash Budget The controller of Feinberg Company is gathering data to prepare the cash budget for...
Related questions
Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
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)
Selling price per unit: $15
Cash collections: 40% in the month of sale. 55% in the month following the sale. 5% are
uncollectible.
The company maintains finished goods inventories equal to 20% of the following month's sales.
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 (number of units that should be produced next month)
Raw material cost is $O.80 per foot of Gilden.
The beginning balance of raw materials for August will be 134,000 feet of Gilden.
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.
The accounts payable balance on August 1 for purchases of Gilden during July will be $82,400
1. What is the August sales budget in dollars?
2. How much money will Milo collect during the month of August?
3. How many units should be produced in the month of August?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning