a. 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. b. All sales are on account. Based on past experience, sales are expected to be collected in the following pattern: The beginning accounts receivable balance (excluding uncollectible amounts) on July 1 will be $130,000. c. 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. d. 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 2,440 pounds. e. 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
Garrison, Ray H.; Noreen, Eric; Brewer, Peter C. (2011-01-05). Managerial Accounting (Kindle Locations 10146-10158). McGraw-Hill Higher Education -A. Kindle Edition.