Swanson, Inc., manufactures an advanced swim fin for scuba divers. Management is
ID: 2504863 • Letter: S
Question
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:
The company maintains finished goods inventories equal to 9% of the following month
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:
Explanation / Answer
1
Sales Budget
July
August
September
Quarter
Budgeted Units
5600
6600
4600
16800
Budgeted Price
13
13
13
13
Budgeted Sales
72800
85800
59800
218400
2
Schedule of Expected Cash Collections
July
August
September
Quarter
Accounts receivable, beginning balance
130000
130000
From budgeted sales:
July sales
31304
34944
66248
August sales
0
36894
41184
78078
September sales
0
0
25714
25714
Total cash collections
161304
71838
66898
300040
3
Production Budget
July
August
September
October
Budgeted sales (pairs)
5600
6600
4600
3600
(+) Closing Inventory
594
414
324
234
Total Needs
6194
7014
4924
3834
(-) Opening Inventory
504
594
414
324
Required Production (pairs)
5690
6420
4510
3510
4
Direct Materials Budget
July
August
September
Quarter
Production needs (lbs.)
22760
25680
18040
66480
(+) Closing Inventory
5136
3608
2808
2808
Total Needs
27896
29288
20848
69288
(-) Opening Inventory
4552
5136
3608
4552
Required Purchases (lbs.)
23344
24152
17240
64736
Cost of Raw Material
58360.00
60380.00
43100.00
161840.00
5
Schedule of Expected Cash Disbursements
July
August
September
Quarter
Accounts payable, beginning balance
11800
130000
July purchases
35016.00
23344.00
58360
August purchases
0.00
36228.00
24152.00
60380
September purchases
0.00
0.00
25860.00
25860
Total cash collections
46816.00
59572.00
50012.00
156400
Sales Budget
July
August
September
Quarter
Budgeted Units
5600
6600
4600
16800
Budgeted Price
13
13
13
13
Budgeted Sales
72800
85800
59800
218400
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