Alternate problem A: CRD Company prepares monthly operating and financial budgets. Estimates of sales in units are made for each month.

Production is scheduled at a level high enough to take care of current needs and to carry into each month 30% of the next month's unit sales. Direct Materials, direct labor, and variable manufacturing overhead are estimated at 10, $8, and $3 per unit, respectively. Total fixed manufacturing overhead is budgeted at $520,000 per month. The inventory at January 1 consists of 20,000 units.

Sales for April, May, June, and July are estimated at 80,000, 100,000, 95,000, and 110,000 units with a rate of $60 per unit

Variable selling and administrative expenses are $20 per unit. Fixed selling and administrative expenses are $800,000 per month.

a) Prepare a sales budget for the second quarter by month.

b) Prepare a schedule showing the budgeted production in units for April, May, and June.

c) Prepare a schedule showing the budgeted costs of goods sold for the same three months.

d) Prepare a budgeted income statement for the first quarter by month.