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Crydon, Inc., manufactures an advanced swim fin for scuba divers.

Crydon, 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 marketing department has estimated sales as follows for the remainder of the year (in pairs of swim fins): The selling price of the swim fins is $50 per pair. July----6,000; August----7,000; September----5,000; October-----4,000; November---3,000; December----3,000.
All sales are on account. Based on past experience, sales are expected to be collected in the following pattern: 40% in the month of sales; 50% in the month following the sale; and 10% uncollectible. The beginning account receivable balance (excluding uncollectible accounts) on July 1 will be $130,000.
The company maintains finished goods inventories equal to 10% of the following month's sales. The inventory of finished goods on July 1 will be 600 pairs.
Each pair of swim fins requires 2 pounds of geico compound. To prevent shortages, the company would like the inventory of geico compound on hand at the end of each month to be equal to 20% of the following month's production needs. The inventory of geico compound on hand on July 1 will be 2.444 pounds.
Geico compound costs $2.50 per pound. Crydon pays for 60% of its purchases in the month of purchase; the remainder is paid for in the following month. The account payable balance for geico compound purchases will be $11.400 on July 1.
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