Exercise 2 Pletcher Company produces and sells automobile batteries, the heavy-duty HD-240. The 2020 sales budget is as follows. Quarter HD-240 1 5,000 2 7,000 3 8,000 4 10,000 The January 1, 2011, inventory of HD-240 is 2,500 units . Management desires an ending inventory each quarter equal to 50% of the next quarter's sales. Sales in the first quarter of 2012 are expected to be 30%_higher than sales in the same quarter in 2020. Instructions: Prepare quarterly production budgets for quarter and in total for 2020. Exercise 3 Frizell Company is preparing its manufacturing overhead budget for 2020. Relevant data consist of the following: Units to be produced by quarters): 10,000 12,000 14,000 16,000 Direct labor. Time is 1.5 hours per unit Variable overhead costs per direct labor hour. Indirect materials $0.70 indirect labor $1.20 and maintenance $0.50 Fixed overhead costs per quarter Supervisory salaries $35,000 Depreciation $16,000 Maintenance $12.000 Instructions: Prepare the manufacturing overhead budget for the year, showing quarterly data. Exercise 4 The budget committee of Guzman Company collects the following data for its Westwood Store in preparing budgeted income statements for July and August 2020. 1. Sale for July are expected to be $400.000 August $450,000 September $500,000 2. Cost of goods sold is expected to be 60% of sales 3. Company policy is to maintain ending merchandise inventory at 20% of the following month's cost of goods sold 4. Operating expenses are estimated to be: Sales salaries $50,000 per month Advertising 4% of monthly sales Delivery expense 2% of monthly sales Sales commissions 3% of monthly sales Rent expense $3,000 per month Depreciation $700 per month Utilities $500 per month Insurance $300 per month 5. Income taxes are estimated to be 30% of income from operations. Instructions: (a) Prepare the merchandise purchases budget for August (6) Prepare budgeted income statements for August