Masters Production, Inc. Masters Production, Inc. needs a Master budget, budgeted financial statements and completion of its initial Balance Sheet. Their next quarter has forecast sales of 6,000 units of product at $70 each for next month. They currently have 300 units of finished goods, but would like to build the ending inventory to 500 units. Their raw material beginning inventory has 800 pounds, but they want to build the ending raw materials to 1200 pounds. They use FIFO method of accounting for inventory. It takes 3 pounds of raw material @ $.50/pound plus 2 hours of direct labor @ $15/hour to make a finished unit. Forecasted overhead is $20,000 plus $2/unit manufactured. Sales commissions are paid $1/unit, and administrative costs are $15,000/month. Customers usually pay 25% the month they buy, with 73% the remaining month. The other 2% is generally uncollectible. Masters Production, Inc. generally pays its vendors 70% the month of purchase and 30% the next month. Laborers, sales personnel, administrators and overhead are all paid in the current month of service. Overhead costs include depreciation on plant and equipment of $5000/month. Last month the sales were $240,000 and materials purchases were $6,000. Complete the balance sheet for the beginning of the month using this information. Assets Cash $3000 Accounts receivable ? Direct materials inventory 400 Work-in-process inventory 0 Finished goods inventory 4650 Plant & equipment (net) 245000 Total assets ? Liabilities and Equity Accounts payable $ ? Common stock 200,000 Retained Earnings ? Total liabilities and equity ? A. Complete the beginning balance sheet. B. Prepare a master budget, including budgeted financial statements, for next month. C. Analyze the income statement, cash budgets, and balance sheet, particularly the changes in receivables and inventory. What changes would you suggest to improve Masters performance?