Cathys cookies produces cookies for resale at local grocery stores. The company is currently in the process of establishing a master budget on a quarterly basis for this coming fiscal year, which ends December 31. Prior year quarterly sales were as follows (1 unit = 1 batch) First quarter: 8000 units Second quarter: 9,600 units Third quarter: 12,000 units Fourth quarter: 10,400 units Unit Sales are expected to increase 20%, and each unit is expected to sell for $5. Management prefers to maintain ending finished goods inventory equal to 15 % of next quarters sales. Assume finished goods inventory at the end of the fourth quarter budget period is estimated to be 2,000 units.

Required: 1. Prepare a sales budget for Cathys cookies.

2. Prepare a production budget for Cathys cookies.

3. What can you interpret about Cathys Cookies sale budget? Trends?