Eliot Sprinkler Systems produces equipment for lawn irrigation. One of the parts used in selected Eliot equipment is a specialty nozzle. The budgeting team is now determining the purchase requirements and monthly cash disbursements for this part. Eliot wishes to have in stock enough nozzles to use for the coming month. On August 1, the company has 18,200 nozzles in stock, although the latest estimate for August production indicates a requirement for only 17,800 nozzles. Total uses of the nozzle are expected to be 17,500 in September and 18,340 in October. Nozzles are purchased at a wholesale price of $22. Eliot pays 25 percent of the purchase price in cash in the month when the parts are delivered. The remaining 75 percent is paid in the following month. Eliot purchased 35,000 parts in July. Required: Estimate purchases of the nozzle (in units) for August and September. Estimate the cash disbursements for nozzles in August and September?

Answer rating: 100% (QA)

To estimate the purchases of the nozzle for August and September as well as the cash disbursements f... View the full answer