Derry Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Derry Manufacturing's operations: (Click the icon to view the data.) (Click the icon to view additional data.) Read the requirements. More info Requirement 1. Prepare a schedule of cash collections for January, February, and March, and for the quarter Derry Manufacturing Cash Collections Budget For the Quarter Ended March 31 a. Actual sales in December were $71,000. Selling price per unit is projected to remain stable at $12 per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as follows: January .. February March. $ 99,600 $ 118,800 $ 115,200 April .. $ 108,000 $ 103,200 Cash sales Credits sales Total cash collections January $ Month February 34,860 $ 41,580 $ 46,150 64,740 March Quarter 40,320 $ 116,760 77,220 188,110 $ 81,010 $ 106,320 $ 117,540 $ 304,870 Requirement 2. Prepare a production budget. (Hint: Unit sales = Sales in dollars + Selling price per unit.) Derry Manufacturing Unit sales Production Budget For the Quarter Ended March 31 Month January February March Quarter 8,300 9,900 Plus: Desired ending inventory 990 960 9,600 900 27,800 900 Total needed 9,290 830 10,860 990 10,500 28,700 960 830 Less: Beginning inventory 8,460 9,870 9,540 27,870 Units to produce Requirement 3. Prepare a direct materials budget. (Round your answers to the nearest whole dollar.) Derry Manufacturing. May.. b.Sales are 35% cash and 65% credit. All credit sales are collected in the month following the sale. c. Derry Manufacturing has a policy that states that each month's ending inventory of finished goods should be 10% of the following month's sales (in units). d. Of each month's direct material purchases, 20% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Three pounds of direct material is needed per unit at $2.00 per pound. Ending inventory of direct materials should be 20% of next month's production needs. e.Most of the labor at the manufacturing facility is indirect, but there is some direct labor incurred. The direct labor hours per unit is 0.05. The direct labor rate per hour is $9 per hour. All direct labor is paid for in the month in which the work is performed. The direct labor total cost for each of the upcoming three months is as follows: January February March... $ 3,807 $ 4,442 $ 4,293 f. Monthly manufacturing overhead costs are $5,500 for factory rent, $2,900 for other fixed manufacturing expenses, and $1.10 per unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which they are incurred. g.Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Derry Manufacturing will purchase equipment for $5,000 (cash), while February's cash expenditure will be $12,200 and March's cash expenditure will be $16,600. h.Operating expenses are budgeted to be $1.25 per unit sold plus fixed operating expenses of $1,800 per month. All operating expenses are paid in the month in which they are incurred. No depreciation is included in these figures. i. Depreciation on the building and equipment for the general and administrative offices is budgeted to be $4,600 for the entire quarter, which includes depreciation on new acquisitions. j. Derry Manufacturing has a policy that the ending cash balance in each month must be at least $4,000. It has a line of credit with a local bank. The company can borrow in increments of $1,000 at the beginning of each month, up to a total outstanding loan balance of $130 000 The interest rate on these loans is 1% per month simple interest (not compounded). The company