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 $400,000 starting May 1. The bank would charge interest at the rate of 1.25 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 550,000 units per month in April, June, and July and at 550,000 units in May. The selling price is $4 per unit. The inventory of finished goods on April 1 was 110,000 units. The finished goods inventory at the end of each month equals 20 percent of sales anticipated for the following month. There is no work in process. The inventory of raw materials on April 1 was 41,250 pounds. At the end of each month, the raw materials inventory equals no less than 30 percent of production requirements for the following month. The company purchases materials in quantities of 66,500 pounds per shipment. Selling expenses are 10 percent of gross sales. Administrative expenses, which include depreciation of $2,500 per month on office furniture and fixtures, total $160,000 per month. The manufacturing budget for tiles, based on normal production of 500,000 units per month, follows: Materials (0.25 pound per tile, 125,000 pounds, $4 per pound) Labor Variable overhead Fixed overhead (includes depreciation of $200,000) Total $ 500,000 390,000 220,000 400,000 $1,510,000 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 0 Net Sales $ 0 Cost of Sales: 0 $ 0 Expenses: 0 0 $