Lane Products manufactures a popular kitchen utensil. The company recently expanded, and the controller belleves that It will need to borrow cash to contlinue operatlons. It opened negotlatlons with the local bank for a one$-$month loan of $$66,000$ starting March $1.$ The bank would charge Interest at the rate of $0\mathrm{.}5$ percent per month and requlre the company to repay interest and princlpal on March $31.$ In considering the loan, the bank requested a projected Income statement and cash budget for March.

The following Information is avallable:

The company budgeted sales at $25,000$ units per month In February, Aprll, and May and at $22,000$ units In March. The selling price is $$73$ per unit.

The company offers a $2$ percent dlscount for cash sales. The company's experlence is that bad debts average $1$ percent of credit sales.

The Inventory of finished goods on February $1$ was $3,700$ units. The desired finished goods Inventory at the end of each month equals $25$ percent of sales anticipated for the following month. There is no work in process.

The Inventory of raw materlals on February $1$ was $2,930$ pounds. At the end of each month, the raw materlals Inventory equals no less than $20$ percent of production requirements for the following month. The company purchases materlals in quantitles of $315$ pounds per shlpment.

Selling expenses are $6$ percent of gross sales. Administrative expenses, which include depreclation of $$1,400$ per month on office furniture and fixtures, total $$76,200$ per month.

The manufacturing burket for the utensil, based on normal production of $24,000$ units per month, follows.Required:a$-1.$ Prepare schedules computing Inventory budgets by months for production in units for February, March, and April.a$-2.$ Prepare schedules computing inventory budgets by months for raw materials purchases in pounds for February and March.b$.$ Prepare a projected income statement for March. Cost of goods sold should equal the varlable manufacturing cost per unit times the number of units sold plus the total fixed manufacturing cost budgeted for the period. Assume that $40$ percent of sales are cash sales.