Chapter 10 - Budgets LFT, a manufacturer of music players, is preparing detailed budgets for the second quarter and has assembled the following information to assist in the budget preparation: The average selling price of the music player is $460 each. Sales for March were 2,000 units. For budget planning purpose, LFT sets a new policy to maintain finished goods inventories equal to 20% of the following month's sales. This requirement will be met at the end of March. Each music player takes 2.5 labour hours to make, and requires 2 units of electronic chips, which are sometimes hard to acquire. Therefore, LFT requires that the ending inventory of the electronic chips be equal to 50% of the following month's production needs. The inventory of the chips on hand at the beginning of the quarter is 1,880 units. LFT pays $20 for each electronic chip, and $32/ hour to its workers. LFT's manufacturing overhead costs are mixed costs, consisting $163,000 of fixed costs and $53.50 variable cost per unit. LFT collects 35% of its sales in the month of sale, and the remaining in the month following sale. LFT pays 40% of its purchase in the month of purchase, and the remaining in the month following purchase. The March purchase of electronic chips was $95,000. Required: 1. Calculate the estimated sales, by month and in total, for the second quarter. 2. Calculate the estimated quantity of music players that need to be produced in April, May, June, and July. 3. Calculate the quantity and the cost of electronic chips that needs to be purchased, by month and in total, for the second quarter. 4. Calculate the cost of the direct labour and the total manufacturing overhead costs, by month and in total, for the second quarter. 5. Calculate the expected cash collections and disbursement for electronic chips, by month and in total, for the second quarter