Felix Inc. is preparing budgets for the second quarter ending on June $30,2024.$SALES BUDGET Budgeted sales of the companys only product for the next five months are:April $.........24,300$ unitsMay $..........36,320$ unitsJune $..........23,800$ unitsJuly $...........21,700$ unitsAugust $......19,800$ units The selling price is $$10\mathrm{.}85$ per unit.SCHEDULE OF EXPECTED CASH COLLECTIONSAdditional data: All sales are on account. The company collects $58\%$ of these credit sales in the month of the sale; $37\%$ arecollected in the month following sale; and the remaining $5\%$ are uncollectible. The accounts receivable balance on March $31$ was $$38,040.$ All of this balance wascollectible.PRODUCTION BUDGETAdditional data: The company desires to have inventory on hand at the end of each month equal to$16\%$ of the following months budgeted unit sales. $4,155$ units were on hand on March $31$st$.$DIRECT MATERIALS BUDGETAdditional data: $6$ pounds of material are required per unit of product. Management desires to have materials on hand at the end of each month equal to$10\%$ of the following months production needs. The beginning materials inventory was $17,200$ pounds. The material costs $$0\mathrm{.}38$ per pound.SCHEDULE OF EXPECTED CASH DISBURSEMENTS FOR MATERIALAdditional data: Fifty$-$seven percent of a months purchases are paid for in the month of purchase; $43\%$is paid for in the following month. No discounts are given for early payment$\mathrm{.}3$ The accounts payable balance on March $31$ was $$18,200.$DIRECTBUDGETAdditional data: Each unit produced requires $0\mathrm{.}05$ hour of direct labor. Each hour of direct labor costs the company $$16\mathrm{.}93$ Management fully adjusts the workforce to the workload each month.MANUFACTURING OVERHEAD BUDGETAdditional data: Variable manufacturing overhead is $$22\mathrm{.}48$ per direct labor$-$hour. Fixed manufacturing overhead is $$33,400$ per month. This amount includes $$16,520$ indepreciation, which is not a cash outflow.ENDING FINISHED GOODS INVENTORY BUDGETAdditional data: The Company uses absorption costing in its budgeted income statement and balancesheet. Manufacturing overhead is applied to units of product on the basis of direct labor$-$hours. The company has no work$-$in$-$process inventories.SELLING AND ADMINISTRATIVE EXPENSE BUDGETAdditional data: Variable selling and administrative expenses are $$0\mathrm{.}62$ per unit sold. Fixed selling and administrative expenses are $$73,500$ per month and include $$16,440$in depreciation.CASH BUDGETAdditional data:$1.$ A line of credit is available at a local bank that allows the company to borrow up to$$75,000$ in one$-$thousand$-$dollar increments.a$.$ All borrowing occurs at the beginning of the month, and all repayments occurat the end of the month.b$.$ The company does not have to make any payments until the end of the quarter.c$.$ The interest rate is $11\%$ annually$\mathrm{.}2.$ Felix Inc. desires a cash balance of at least $$25,000$ at the end of each month. Thecash balance at the beginning of April was $$26,700\mathrm{.}3.$ Cash dividends of $ $15,000$ are to be paid to stockholders in April$\mathrm{.}44.$ Equipment purchases of $$98,050$ are scheduled for May and $$62,900$ for June. Thisequipment will be installed and tested during the second quarter and will notbecome operational until July, when depreciation charges will commence.Requirements: $($In completing all the budgets and financial statements, use formulasonly except for the inputs tab and the four items specified in the budgeting projectlecture.$)(1)$ Prepare the following budgets for April, May, and June $($and second quarter totals$)$:$($a$)$ Sales Budget$($b$)$ Production Budget$($c$)$ Direct Materials Budget$($d$)$ Direct Labor Budget$($e$)$ Manufacturing Overhead Budget$($f$)$ Ending Finished Goods Inventory Budget$($g$)$ Selling and Administrative Expense Budget$($h$)$ Cash Budget$(2)$ Prepare a budgeted income statement for the quarter ending June $30,2024,$ and abudgeted balance statement as of June $30,2024.$Felix Inc.Balance SheetMarch $31,2024$AssetsCash $$26,700$Accounts receivable $$38,040$Raw materials inventory $$6,536$Finished goods inventory $$22,314$Total current assets $93,590$Property, plant, and equipment:Land $380,000$Buildings and equipment $1,483,285$Less: Accumulated depreciation $(680,000)$Buildings and equipment, net $803,285$Total assets $1,276,875$Liabilities and stockholders equityCurrent liabilities:Accounts payable $18,200$Stockholders equity:Common stock $300,000$Retained earnings $958,675$Total Stockholders Equity $1,258,675$Total liabilities and stockholders equity $1,276,875$