Freese, Inc., is in the process of preparing the fourth quarter budget for 2013, and the following data have been assembled:

The company sells a single product at a price of $60 per unit. The estimated sales volume for the next six months is as follows:

September	13,000 units
October	12,000 units
November	14,000 units
December	20,000 units
January	9,000 units
February	10,000 units

	All sales are on account. The companys collection experience has been that 32% of a months sales are collected in the month of sale, 64% are collected in the month following the sale, and 4% are uncollectible. It is expected that the net realizable value of accounts receivable (i.e., accounts receivable less allowance for uncollectible accounts) will be $499,200 on September 30, 2013.
	Managements policy is to maintain ending finished goods inventory each month at a level equal to 40% of the next months budgeted sales. The finished goods inventory on September 30, 2013, is expected to be 4,800 units.
	To make one unit of finished product, 5 pounds of materials are required. Managements policy is to have enough materials on hand at the end of each month to equal 30% of the next months estimated usage. The raw materials inventory is expected to be 19,200 pounds on September 30, 2013.
	The cost per pound of raw material is $4, and 70% of all purchases are paid for in the month of purchase; the remainder is paid in the following month. The accounts payable for raw material purchases is expected to be $75,960 on September 30, 2013.

Required:

a.

Prepare a sales budget in units and dollars, by month and in total, for the fourth quarter (October, November, and December) of 2013.

	October	November	December	Total
Expected Sales in units	12000	14000	20000	46000
Selling Price per Unit	60	60	60	60
Total Sales	720000	840000	1,200,000	2,760,000

b.

Prepare a schedule of cash collections from sales, by month and in total, for the fourth quarter of 2013.

Cash Collections From:	October	November	December	Total
Sept sales	499,200	0	0	499,200
Oct sales	230,400	460,800	0	691,200
Nov sales	0	268,800	537,600	806,400
Dec sales	0	0	384,000	384,000
Total cash collections	729,600	729,600	921,600	2,380,800

c.

Prepare a production budget in units, by month and in total, for the fourth quarter of 2013.

	October	November	December	Total
Beginning inventory of finished goods	4800	5600	8000	18400 showing as incorrect??
Units to be produced	12800	16400	15600	44800
Goods available for sale	17600	22000	23600	63200
Desired ending inventory of finished goods	5600	8000	3600	17200 showing as incorrect??
Quantity of goods sold	12000	14000	20000	46000

d.

Prepare a materials purchases budget in pounds, by month and in total, for the fourth quarter of 2013

	October	November	December	Total
Beginning inventory or raw materials
Purchases of raw material
Raw material available for use
Desired ending inventory of raw materials
Quantity of raw materials to be used in production