Master Budgeting From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the seeand quarter. 2. Assume that the company will prepare a budgeted balance sheet as of June 30 . Compute the accounts receivable as of that date. EXERCISE 8-2 Production Budget [Lo8-3] Down Under Products, Ltd., of Australlia has budgeted sales of its popular boomerang for the next four months as follows: The company is now in the process of preparing a production budget for the second quarter. Past experience has shown thatend-of-month inwentory levels must equal 10% of the following month's sales. The inventory at the end of March-was 5,000 units. Required: Prepare a production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total. .2CISE 8-3 Direct Materials Budget [LO8-4] uree grams of musk oil are required for each bottle of Mink Caress, a very popular perfurne made by_a small company in western Siberia. The cost of the musk oil is \$1.50 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3 : Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a guarter must be equal to. 20% of the following quarter's pmoduction needs. Some 36,000 grams of musk oil will be on hand to start-the first quarter of Year 2. Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. At the bottom of your budget, show the amount of purchases for each quarter and for the year in total. PEo0. IN UNTTS 60,00090,00015000010000070,000FIRST - Geamszevnit xxxxx Proo. Neros +DEI(20%NoOOn)+ Tomineos - Ber len. Given Tor. Pur Ganans cosfexterm 1.501301.501.501.50 * Fourta Qu unter YR.Proouction 70,000 * Grams Pervnit x Pesoneros 20%NEx)QQuAREsx DEl Fourta