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#### Jiklo Limited has the following sales budget for the next four months for its top-of-the line widgets:   May June July August Units 4,000 5,000 6,000 6,500 Sales (\$ millions) 20 25 33 39 Each widget requires 15 grams of Palladium, which costs \$70 per gram

###### Accounting

Jiklo Limited has the following sales budget for the next four months for its top-of-the line widgets:

 May June July August Units 4,000 5,000 6,000 6,500 Sales (\$ millions) 20 25 33 39

Each widget requires 15 grams of Palladium, which costs \$70 per gram.

32% of accounts receivable are collected in the month of sale; 65% are collected in the following month and 3% are expected to go bad. A 2% discount is given to customers who pay within the month of sale.

Raw materials inventory at the end of each month should be 28% of the following month's production requirements. 30% of the cost of raw materials purchases is paid in the month of purchase and the remainder is paid in the following month.

Finished goods inventory at the end of each month should be 58% of the following month's sales requirements. At the beginning of May, the inventory is expected to be 3,000 units.

Prepare production and raw materials budgets and use them to answer the following questions:

Calculate the number of widgets that need to be produced in June.

Calculate the number of widgets that need to be produced in July.

Calculate the required inventory of Palladium in grams at the end of May.

Calculate the required inventory of Palladium in grams at the end of June.

Calculate the amount of Palladium in grams expected to be used for production in May.

Calculate the amount of Palladium in grams expected to be used for production in June.

Calculate the required amount of Palladium in grams that must be purchased in May.

Calculate the required amount of Palladium in grams that must be purchased in June.

Calculate the expected cash collections from receivables for June, in millions of dollarsShow your answer to the nearest \$0.1 million (for example, \$123,456,789 should be shown as 123.5 or \$123.5).

Calculate the expected cash disbursements for raw materials for June, in millions of dollarsShow your answer to the nearest \$0.1 million (for example, \$12,345,678 should be shown as 12.3 or \$12.3).

## 2.91 USD

### Option 2

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