Parker Manufacturing Company produces mountain bikes and sells all of them to a wholesaler at $70...

  

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Parker Manufacturing Company produces mountain bikes and sells all of them to a wholesaler at $70 per bike. The agreement between Parker and the wholesaler allows the wholesaler to pay Parker 80% of the bike price the month after the sale and the rest two months after the sale. Parker expects the following sales for the upcoming months: Bike Sale 7,000 May June 7,200 July 8,000 August 8,500 September 8,200 October 6,000 November 6,200 1. Prepare a CASH COLLECTION BUDGET for Parker for each of the months in the third quarter and for the third quarter in total. Parker desires an ending inventory to be equal to 40% of the next month's sales needs. July 1 inventory is projected to be 3,200 bikes. Each bikes require two special ordered wheels ($10 each). June 1 wheel inventory is projected to be 5,028 units. Parker also needs to maintain wheel inventory equal to 30% of next month's production needs. 2. Prepare a PRODUCTION BUDGET for Parker for each of the months in the third quarter and for the third quarter in total. 3. Prepare a DIRECT MATERIAL BUDGET for the wheels Parker needs for each of the months in the third quarter and for the third quarter in total. Include both the quantity of wheels to be purchased and the cost of the purchases. Parker Manufacturing Company produces mountain bikes and sells all of them to a wholesaler at $70 per bike. The agreement between Parker and the wholesaler allows the wholesaler to pay Parker 80% of the bike price the month after the sale and the rest two months after the sale. Parker expects the following sales for the upcoming months: Bike Sale 7,000 May June 7,200 July 8,000 August 8,500 September 8,200 October 6,000 November 6,200 1. Prepare a CASH COLLECTION BUDGET for Parker for each of the months in the third quarter and for the third quarter in total. Parker desires an ending inventory to be equal to 40% of the next month's sales needs. July 1 inventory is projected to be 3,200 bikes. Each bikes require two special ordered wheels ($10 each). June 1 wheel inventory is projected to be 5,028 units. Parker also needs to maintain wheel inventory equal to 30% of next month's production needs. 2. Prepare a PRODUCTION BUDGET for Parker for each of the months in the third quarter and for the third quarter in total. 3. Prepare a DIRECT MATERIAL BUDGET for the wheels Parker needs for each of the months in the third quarter and for the third quarter in total. Include both the quantity of wheels to be purchased and the cost of the purchases.

Answer rating: 100% (QA)

CASH COLLECTION BUDGET for Parker Manufacturing Company Third Quarter Cash Collection Budget Month S... View the full answer