1a. . Jorgen manufactures two products: A and B. The company predicts a sales volume of 10,000 units for product A and ending finished-goods inventory of 2,000 units. These numbers for product B are 12,000 and 3,000, respectively. Jaergin currently has 7,000 units of A in inventory and 9,000 units of B. The unit selling price for A and B are $200 and $250 respectively. The following raw materials are required to manufacture these products:

Raw Material	Cost Per Pound	Required for Product A	Required for Product B	Desired ending direct materials	Beginning direct materials
X	$2.00	2 pounds	1 pound	800	5,000
Y	$2.50	1 pound	4 pounds	1,200	7,000

Product A requires three hours of labor; B requires one hour. The direct labor rate is $10 per hour.

An accounting assistant has prepared the detailed production overhead budget and the selling and administrative budget. The production overhead budget shows total cost of $60,000 for product A and $80,000 for product B. Production overhead is applied on the basis of direct labor. The selling and administrative budget shows total cost of $42,000 for product A and $52,000 for product B.

Required for Product A and B:

1. Prepare a sales budget

2. Prepare a production budget in units

3. Prepare a raw material budget for materials X, and Y.

4. Prepare a direct labor budget.

5. Compute the predetermined overhead rate

6. Prepare a multistep income statement

1b) Jorgen expects to collect all revenue in the month received and pay all expenses in the month incurred. Jorgen also wants to maintain a minimum cash balance of $25,000. Jorgen has a $50,000 line of credit it can borrow from if needed. The beginning cash balance was $30,000.

Required

Based on the above information and information given in 1a prepare a cash budget.