Soprano Co. is in the process of preparing the second quarter budget for 2013, and the following data have been assembled:
'The company sells a single product at a selling price of $41 per unit. The estimated sales volume for the next six months is as follows:
March 6,000 units
April 7,300 units
May 10,100 units
June 8,200 unit
July 9,300 unit
August 6,300 unit
All sales are on account. The company's collection experience has been that 41% of a month's sales are collected in the month of sale, 51% are collected in the month following the sale, and 8% are uncollectible. It is expected that the net realizable value of accounts receivable (i.e.. accounts receivable less allowance for uncollectible accounts) will be $125,460 on March 31, 2013.
- Management's policy is to maintain ending finished goods inventory each month at a level equal to 53% of the next month's budgeted sales. The finished goods inventory on March 31, 2013, is expected to be 3.869 units.
- To make one unit of finished product. 4 pounds of materials are required. Management's policy is to have enough materials on hand at the end of each month to equal 41% of the next month's estimated usage. The raw materials inventory is expected to be 14,406 pounds on March 31, 2013.
The cost per pound of raw material is $6.00, and 78% of all purchases are paid for in the month of purchase; the remainder is paid in the following month. The accounts payable balance for raw material purchases is expected to be $39,853 on March 31. 2013.
Required:
a. Prepare a sales budget in units and dollars, by month and in total. for the second quarter (April, May, and June) of 2013.
b. Prepare a schedule of cash collections from sales, by month and in total, for the second quarter of 2013.
c. Prepare a production budget in units, by month and in total, for the second quarter of 2013.
Prepare a materials purchases budget in pounds, by month and in total, for the second quarter of 2013. (Round your answers to whole number.)
Prepare a schedule of cash payments for materials, by month and in total, for the second quarter of 2013. (Round your answers to whole number.)