Eliot Sprinkler Systems produces equipment for lawn irrigation. One of the parts used in selected...
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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 the company has nozzles in stock, although the latest estimate for August production indicates a requirement for only nozzles. Total uses of the nozzle are expected to be in September and in October.
Nozzles are purchased at a wholesale price of $ Eliot pays percent of the purchase price in cash in the month when the parts are delivered. The remaining percent is paid in the following month. Eliot purchased 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.
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