At March 31, Sturm Enterprises had 38,000 units in finished goods inventory and accounts receivable of $85,000. Sales in units have been budgeted as follows:

MonthUnits April60,000

May75,000

June90,000

July81,000

Sturm has just established a policy that finished goods inventory at the end of each month should be 40% of the units required for the following month's sales. Additional assumptions are as follows:

* The sales price will be $2 per unit.

* All sales will be on account (i.e. no cash sales). One third of all sales will be collected in the month of sale with the balanced collected in the following month.

REQUIRED: a. prepare a production budget for the months of April and May.

b. prepare a schedule of cash collections for the months of April and May.