Joseph A. Knab distributes men's suits in the Southwest. The following information was gathered to prepare the budget for the third quarter 4 Suits are budgeted to sell for an average price of $225. Unit sales are expected to be as follows: June 4,000 suits July 4,500 suits August 4,700 suits September 4,600 suits October 4,600 suits Sales are made for cash and on credit. The following collection pattern is used to estimate monthly cash collections: Cash sales 41% Credit sales-month of sale 35 Credit sales-month after sale 20 Uncollectible Total 100% The company tries to maintain an inventory of 25% of the following month's sales. The company expects to have 1,125 suits on hand on June 30. Knab pays an average of $146 per suit. The company pays for 70% of its purchases in the month of purchase and the remaining 30% in the month after purchase. The following monthly selling and administrative expenses are planned for the quarter, though advertising will have a one- time $30,000 increase in August. Fixed Variable Overhead Cost/Unit Depreciation $9,000 Rent 40,000 Advertising 84.000 Salaries 150,000 Bad debts $9.00 Joseph A. Knab distributes men's suits in the Southwest. The following information was gathered to prepare the budget for the third quarter. Suits are budgeted to sell for an average price of $225. Unit sales are expected to be as follows: June 4,000 suits July 4,500 suits August 4,700 suits September 4,600 suits October 4,600 suits Sales are made for cash and on credit. The following collection pattern is used to estimate monthly cash collections: Cash sales 41% Credit sales-month of sale 35 Credit sales-month after sale 20 Uncollectible Total 100% The company tries to maintain an inventory of 25% of the following month's sales. The company expects to have 1,125 suits on hand on June 30. Knab pays an average of $146 per suit. The company pays for 70% of its purchases in the month of purchase and the remaining 30% in the month after purchase. The following monthly selling and administrative expenses are planned for the quarter, though advertising will have a one- time $30,000 increase in August. Fixed Variable Overhead Cost/Unit Depreciation $9.000 40,000 Advertising 84.000 Salaries 150,000 Bad debts $9.00 4 Rent