EXERCISE 1 Sales, Production and Direct Material Budgets . Soriano Company is preparing its master budget for 2020. Relevant data pertaining to its sales, production, and direct materials budgets are as follows. Sales. Sales for the year are expected to total 1,200,000 units. Quarterly sales, as a percentage of total sales, are 20%, 25%, 30%, and 25%, respectively. The sales price is expected to be $50 per unit for the first three quarters and $55 per unit beginning in the fourth quarter. Sales in the first quarter of 2021 are expected to be 10% higher than the budgeted sales for the first quarter of 2020 Production Management desires to maintain the ending finished goods inventories at 25% of the next quarter's budgeted sales volume. Direct materials. Each unit requires 3 pounds of raw materials at a cost of $5 per pound. Management desires to maintain raw materials inventories at 5% of the next quarter's production requirements. Assume the production requirements for the first quarter of 2021 are 810,000 pounds. Required: Prepare the sales, production, and direct materials budgets by quarters for 2020. LEARNING CASE 2: CASH BUDGET Hybrid Sdn Bhd has budgeted sales revenues as follows: Sales revenue (credit) Sales revenue (Cash) Q1 (RM) 500.000 100,000 Q2 (RM) 450,000 150,000 Q3(RM) 480,000 200.000 Additional information is available as follows: 1. Based on the previous experience Hybrid Sdn. Bhd. will collect 60% of the credit sales in the month of sale and the remaining 40% will be collected in the following month, 2. All the purchases related to inventory are all on credit and 50% is paid in the month of purchase and 50% in the month following purchase. Budgeted inventory purchases are: . 01 RM300,000 240,000 Q2 . 3 105,000 3. Other cash disbursements budgeted: (a) selling and administrative expenses of RM48,000 each month, (b) dividends of RM103,000 will be paid in Q2, and (c) purchase of equipment in Q3 for RM30,000 cash. 4. The company wishes to maintain a minimum cash balance of RM300,000 at the end of each quarter. 5. The company borrows money from the RHB bank at 6% interest to maintain the minimum cash balance (if necessary). Hybrid expected to repay the loan in months when there is an excess cash balance. Assume that borrowed money in this case is for one month. 6. The beginning cash balance on Q2 is estimated to be RM50,000. REQUIRE: Prepare separate schedules for expected collections from customers and expected payments for purchases of inventory. Prepare a cash budget for the quarter of Q2 and 23