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 650,000 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 130,000 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 63,000 pounds. At the end of each month, the raw materials inventory equals no less than 40 percent of production requirements for the following month. The company purchases materials in quantities of 71,500 pounds per shipment . Selling expenses are 10 percent of gross sales. Administrative expenses, which include depreciation of $2,000 per month on office furniture and fixtures, total $155,000 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 $210,000) Total $ 500,000 390,000 190,000 400,000 $1,480,000 Required: a-1. Prepare schedules computing inventory budgets by months for production in units for April, May, and June. a-2. Prepare schedules computing inventory budgets by months for raw materials purchases in pounds for April and May. 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. Required: a-1. Prepare schedules computing inventory budgets by months for production in units for April, May, and June. a-2. Prepare schedules computing inventory budgets by months for raw materials purchases in pounds for April and May. 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. Complete this question by entering your answers in the tabs below. Reg A1 Req A2 Req B Prepare schedules computing inventory budgets by months for raw materials purchases in pounds for April and May. May 142,500 Schedule Computing Raw Materials Inventory Purchase Budget (Pounds) For April and May April Budgeted Production needs in pounds 157,500 Inventory required at end of month Total pound needs 157,500 Less: Inventory on hand at beginning of month 63,000 Balance required to purchase 94,500 Budgeted purchases - Pounds 214,500 142,500 57,000 85,500 214,500 Prepare a projected income statement for May. Cost of goods sold should equal the variable manufacturing cost per unit tin the number of units sold plus the total fixed manufacturing cost budgeted for the period. When calculating net sales assum 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 Sales revenue Cash discounts on sales Estimated bad debts 0 0 Net Sales Cost of Sales: Variable cost Fixed Cost 0 0 Gross profit on sales Expenses: Selling expense Administrative expense Interest expense 0 $ 0