Klandon Company manufactures decorative rocks for aquariums. Kim Klandon is preparing the budget for the quarter ended June 30. She has gathered the following information. Klandon's sales manager reported that the company sold 12,000 bags of rocks in March. He has developed the following sales forecast. The expected sales price is $10 per bag April May June July August 20,000 bags 50,000 bags 30,000 bags 25,000 bags 15,000 bags 2. Sales personnel receive a 5 percent commission on every bag of rocks sold. The following monthly fixed selling and administrative expenses are planned for the quarter. However, these amounts do not include the depreciation increase resulting from the budgeted equipment purchase in June (see part 7 Monthly Fixed Selling and Administrative Costs Variable Cos/Unit Depreciation Salaries of sales personnel Advertising Management salaries Miscellaneous Bad debts $10,000 25,000 1,000 10,000 500 $0.50 0.50 $1.00 Total costs $46,500 3. The standard labor allowed for one bag of rocks is 15 minutes. The current direct labor rate is $10 per hour 4. After experiencing difficulty in supplying customers in a timely fashion due to inventory shortages, the company established a policy requiring the ending finished goods inventory to equal 20 percent of the following month's budgeted sales, in units. On March 31,4,000 bags were on hand month's production needs. On March 31,13,000 pounds of materials were on hand The raw materials used in production cost $0.40 per pound. Half of the month's purchases is paid for in the month of purchase; the other half, in the following month. No discount is available 5. Five pounds of raw materials are required to fill each bag of finished rocks. The company wants to have raw materials on hand at the end of each month equal to 10 percent of the following