Wonderland Limited ('WLL') is a manufacturer of solar garden lights ('SL') . WLL sells these lights to distributors for a list price of $50 each. Based on historical records 70% of sales are expected to be collected in the month of sales, and 30% collected in the month following the sales. The budgeted sales for SL garden lights for Jul 2023 to Dec 2023 are as stated below: SL Lights Units Jul 2023 3,600 Aug 2023 4,800 Sep 2023 2,400 Oct 2023 3,000 Nov 2023 4,200 Dec 2023 6,600

The company maintains 40% of the next month's sales in ending inventory. In addition, each SL light uses 1 photovoltaic ('PV') cell. These PV cells must be imported from an overseas supplier. The PV cell costs $8.50 per cell. It is expected the company will maintain 50% of the next month's usage in ending inventory. The company estimates its account receivable at 30 June 2023 to be $54,000.

Compute the production budget in units for SL lights for each of three months from Jul 2023 to Sep 2023, and for the Quarter.

Present the direct material purchase budget for PV cells, in units and in dollars, for each of three months of Jul 2023 to Sep 2023, and for the Quarter.

Construct the cash receipts budget for each of three months of Jul 2023 to Sep 2023, and for the Quarter.

Answer rating: 100% (QA)

To compute the production budget for SL lights and the direct material purchase budget for PV cells we need to consider the given information and apply the relevant calculations Lets break down the ca... View the full answer