Freese Inc. is in the process of preparing the fourth quarter budget for 2019, and the following data have been assembled:

∙ The company sells a single product at a price of $50 per unit. The estimated sales volume for the next six months is as follows:

September . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,000 units
October . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... . . . 24,000 units
November . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... . . 28,000 units
December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... . 40,000 units
January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... . 18,000 units
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . 20,000 units

∙ All sales are on account. The company’s collection experience has been that 33% of a month’s sales are collected in the month of sale, 65% are collected in the month following the sale, and 2% are uncollectible. It is expected that the net realizable value of accounts receivable (i.e., accounts receivable less allowance for uncollectible accounts) will be $845,000 on September 30, 2019.

∙ Management’s policy is to maintain ending finished goods inventory each month at a level equal to 40% of the next month’s budgeted sales. The finished goods inventory on September 30, 2019, is expected to be 9,600 units.

∙ To make one unit of finished product, five pounds of materials are required. Management’s policy is to have enough materials on hand at the end of each month to equal 30% of the next month’s estimated usage. The raw materials inventory is expected to be 38,400 pounds on September 30, 2019.

∙ The cost per pound of raw material is $4, and 75% of all purchases are paid for in the month of purchase; the remainder is paid in the following month. The accounts payable for raw material purchases is expected to be $126,600 on September 30, 2019.

Required:

a. Prepare a sales budget in units and dollars, by month and in total, for the fourth quarter (October, November, and December) of 2019.

b. Prepare a schedule of cash collections from sales, by month and in total, for the fourth quarter of 2019.

c. Prepare a production budget in units, by month and in total, for the fourth quarter of 2019.

d. Prepare a materials purchases budget in pounds, by month and in total, for the fourth quarter of 2019.

e. Prepare a schedule of cash payments for materials, by month and in total, for the fourth quarter of 2019.