M Company has projected sales and production in units for the second quarter of next year as follows:

Jul Aug Sep

Sales 60,000 40,000 50,000

Production 50,000 50,000 60,000 Required: a. Cash production costs are budgeted at $6 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses (all of which are paid in cash) amount to $120,000 per month. The accounts payable balance on June 30 totals $192,000, all of which will be paid in July. Prepare a schedule for each month showing budgeted cash disbursements for M Company. b. Assume that all units will be sold on account for $15 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on June 30 totaled $510,000 $(90,000 from May's sales and the remainder from June). Prepare a schedule for each month showing budgeted cash receipts for M Company.