Brighton, Inc., manufactures kitchen tiles. The company recently expanded, and the controller believes that it will need to borrow cash to continue operations. It began negotiating for a one-month bank loan of $500,000 starting May 1. The bank would charge interest at the rate of 1.00 percent per month and require the company to repay interest and principal on May 31. In considering the loan, the bank requested a projected income statement and cash budget for May The following information is available: . The company budgeted sales at 600,000 units per month in April, June, and July and at 500,000 units in May. The . The inventory of finished goods on April 1 was 150,000 units. The finished goods inventory at the end of each month . The inventory of raw materials on April 1 was 57,500 pounds. At the end of each month, the raw materials inventory selling price is $4 per unit equals 25 percent of sales anticipated for the following month. There is no work in process. equals no less than 40 percent of production requirements for the following month. The company purchases materials . Selling expenses are 10 percent of gross sales Administrative expenses, which include depreciation of $3,000 per . The manufacturing budget for tiles, based on normal production of 500,000 units per month, follows in quantities of 65,500 pounds per shipment month on office furniture and fixtures, total $160,000 per month Materials (0.25 pound per tile, 125,000 pounds, $4 per pound Labor Variable overhead Fixed overhead (includes depreciation of $180,000) Total $ 500,000 380,000 210,000 380 000 $1,470.000 Required: a. Prepare schedules computing inventory budgets by months for 1. Production in units for April, May, and June. (Do not round intermediate calculations.) BRIGHTON, INC. Schedule Computing Production Budget (Units) For April, May, and June April May June Budgeted sales Inventory required at end of month Total needs Less: Inventory on hand at beginning of month Budgeted production-Units 2. Raw materials purchases in pounds for April and May. (Do not round intermediate calculations.) Schedule Computing Raw Materials Inventory Purchase Budget (Pounds) For April and May April May Total pound needs Balance required by purchase Budgeted purchases Pounds b. Prepare a projected income statement for May. Cost of goods sold should equal the variable manufacturing cost per unit times the number of units sold plus the total fixed manufacturing cost budgeted for the period. When calculating net sales assume cash discounts of 1 percent and bad debt expense of 0.50 percent. (Do not round intermediate calculations.) BRIGHTON, INC. Projected Income Statement For the Month of May Net Sales Cost of Sales: Expenses