Chapter 9 50 MARKS Pearson's Inc is preparing its budget for the third quarter of 2022 (July to September). The company has gathered information from its managers in preparation of the budgeting process. Sales Unit sales for May 2021 Unit sales for June 2021 112,500 102,100 Expected unit sales for July 2021 113,000 Expected unit sales for August 2021 112,500 Expected unit sales for September 2021 116,000 Expected unit sales for October 2021 125,000 Expected unit sales for November 2021 Unit selling price 137,500 $12 Production The company likes to keep 10% of the next month's unit sales in ending inventory. Cash Collections All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on June 30, 2021, totaled $183,780. Direct Materials Direct materials cost $0.75 per pound. Two pounds of direct materials are required to produce each unit. Pearson's Inc likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on June 30, 2021 totaled 11,295 pounds. Desired ending direct materials on September 30, 2021 is 12,625 pounds. Direct Materials - Disbursements