Davis Dry Goods distributes silk ties. You are in charge of creating Davis master budget for the upcoming second quarter, April-June 2015.

Davis desires a minimum ending cash balance each month of $11,000. The ties are sold to retailers for $9 each. Recent and forecasted sales in units are as follows:

January (actual) . . . . . . . . . 20,000

February (actual) . . . . . . . . 24,000

March (actual) . . . . . . . . . . 28,000

April . . . . . . . . . . . . . . . . . . 35,000

May . . . . . . . . . . . . . . . . . . 45,000

June . . . . . . . . . . . . . . . . . . 60,000

July . . . . . . . . . . . . . . . . . . 40,000

August . . . . . . . . . . . . . . . 36,000

September . . . . . . . . . . . . . 32,000

The large build-up in sales before and during June is due to Father's Day. Ending inventories are supposed to equal 90% of the next month's sales in units. The ties cost the company $5 each.

Purchases are paid for as follows: 50% in the month of purchases and the remaining 50% in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 25% of a month's sales are collected by month-end. An additional 75% is collected in the following month. Bad debts have been negligible.

The company