BUS2102- Spring 2019- Chapter 9 Fun& Exciting Exercises Exercise 1) Using the template provided to you in class, create a sales budget, production budget, direct materials purchases budget, and direct labor budget. Only rows that say 2D should ve 2 decimal places. All other numbers should be rounded to the nearest unit or dollar amount (i.e., no decimals). Lava Company is a high-technology organization that produces a mass-storage system. The units Lava produces combine positive features of both compact and hard disks. The company is completing its fifth year of operations and is preparing to build its master budget for the coming year (2020). The budget will detail each quarter's activity and the activity for the year in total. The master budget will be based on the following information: Fourth-quarter sales for 2019 are 55,000 units. Unit sales by quarter (for 2020) are projected as follows: a. b. First quarter Second quarter Third quarter Fourth quarter 96,150 88,010 97,125 110,110 The selling price is $676 per unit. All sales are credit sales, Lava collects 85% of all sales within the quarter in which they are realized, the other 15% is collected in the following quarter. There are no bad debts. There are 6,666 units in beginning inventory of finished goods. Lava is planning the following ending finished goods inventories for each quarter. c. First quarter Second quarter Third quarter Fourth quarter 27,270 units 5,330 units 10,485 units 40,408 units Each mass-storage unit uses 7.85 hours of direct labor and 5.99 units of direct materials. Laborers are paid $22.75 per hour, and one unit of direct materials costs $76.57 d. At the end of each quarter, Lava plans to have 17.89% of the direct materials needed for next quarter's production needs. Lava will end the year with the same amount of direct materials found in the year's beginning inventory e