E$6\mathrm{.}10($LO $3,4),$ AN Business Writing Transitioning from employee to manager has been exciting for Jalen! He enjoys having the responsibility and authority to make decisions, and it is rewarding to join the management team, sharing insights to make better decisions. One of his first responsibilities is to address the DM purchases budget. The company has a strong relationship with its current supplier, but the quality of the supplier's DM has declined. Knowing this, Jalen has already reached out to a different vendor to see what kind of a deal it might offer. The DM information for Jalen's division and for each vendor just described is as follows.

DM on hand as of July $1$ slightly exceeds expectations at $1,500$ linear board feet.

Each unit requires $4$ linear board feet; Jalen is most comfortable if the company has $20\%$ of the following month's production needs on hand.

The cost per linear foot is $$6\mathrm{.}50$ with the current supplier; it's $$7\mathrm{.}00$ with the new vendor.

Planned production for July is $1,800$ units; for August is $2,200$ units; for September is $2,000$ units; and for October is $1,700$ units.

The A$/$P balance related to June DM purchases is $$34,125$ on July $1.$

Required

a$.$ Prepare the DM purchases budget for the third quarter, assuming Jalen stays with the current supplier. Specify amounts for each month and for the quarter overall.

b$.$ The credit terms with the current supplier allow for $30\%$ to be paid in the month of purchase and $70\%$ in the following month. While this supplier doesn't offer any discount for early payment, Jalen's company has been able to benefit from these terms by waiting until the month following the purchase to pay for most of each purchase. Outline the schedule of cash disbursements for quarter $3$ that would accompany these purchases. Present amounts for each month and for the quarter overall. Also identify the A$/$P balance as of September $30.$

c$.$ If$,$ instead, Jalen decides to buy his materials from the new vendor, how much more will the purchases cost each month, assuming the same ending inventory requirements? How would this change in suppliers affect monthly cash disbursements? Assume the new vendor offers payment terms of $\frac{2}{10},$ net $30.$ Jalen is committed to receiving the discount. Assume monthly purchases are all made within the first $20$ days of the month. Present cash disbursement amounts for each month and for the quarter overall. Also identify the A$/$P balance as of September $30.$

d$.$ Assume Jalen decides to go with the new vendor, thus altering the previously planned cash disbursements schedule. Write a brief memo to the controller explaining the situation.

Prepare a cash budget for one quarter.