LOAN DETAILS LAF has requested a line of credit of US$60,000 to cover production costs during the seasonal increase in business. Kent Bank uses the following terms on its lines of credit. All borrowing is done at the beginning of the month in whole dollar increments. All repayments are made at the end of the month in whole dollar increments. The full line of credit is expected to be paid off by the end of the quarter with all the interest repaid at the end of the quarter. The interest rate on this loan is 16% per year. Input Data (all currency in US$) Yellow-use only cell references Blue-may type numbers here Little Annin Flagmakers Sales Budget (USS) Budgeted Sales April (units) May (units) Expected April May June Quarter 2,500 6,000 June (units) July (units) 3,000 Budgeted sales (units) Selling price per unit Total Sales 2,500 6,000 3,000 11,500 $120 $120 $120 $120 $ 300,000 $ 720,000 $ 360,000 $ 1,380,000 2,500 August (units) 2,000 Selling Price/Unit $120.00 Little Annin Flagmakers Schedule of Expected Cash Collections (USS) April May June Quarter Cash Collection Pattern Month of sale 40% Accounts receivable Beginning balance $132,000 $132,000 Following month 55% Uncollectible 5% April sales $ 120,000 $ 165,000 S 285,000 Cash Payments for Materials May sales $ 288,000 $ 396,000 $ 684,000 3 Month of purchase 40% Following month 60% June sales $ 144,000 $ 144,000 Production Requirements Total Cash Collections $252,000 $ 453,000 $ 540,000 $1,245,000 Raw material per unit (lb.) S Raw material cost per lb. $7.00 Accounts Receivable as of June 30 $ 198,000 Direct labor hours per unit 0.5 Direct labor rate per hour $40.00 Little Annin Flagmakers Variable MOHD per direct labor hour $10.00 Production Budget Fixed MOHD per month $57,950 April May June 3 Depreciation in fixed MOHD $20,000 Budgeted sales 2,500 6,000 3,000 Quarter 11,500 July 2,500 August 2,000 Add: Desired ending inventory 1,200 600 500 Selling & Administrative (S&A) Costs Total needs 3,700 6,600 3,500 500 12,000 400 2,900 Variable S&A cost per unit sold $1.25 Less: Beginning inventory 410 1,200 600 410 500 Fixed S&A cost per month $63,000 Required Production 3,290 5,400 2,900 11,590 2,400 Depreciation in fixed S&A cost $10,000