Milo-Freeze Company manufactures and sells a product that has seasonal variations in demand, with peak sales coming in the third quarter. The following information concerns operations for Year 2- the coming year- and for the first two quarters of Year 3:

1. The companys single product sells for $10 per unit. Budgeted sales in units for the next six quarters are as follows:

	Year 2 Quarter				Year 3 Quarter
	1	2	3	4	1	2
Budgeted unit sales	40,000	60,000	100,000	50,000	70,000	80,000

2. Sales are collected in the following pattern: 75% in the quarter the sales are made, and the remaining 25% in the following quarter. On January 1, Year 2, the companys balance sheet showed $65,000 in accounts receivable, all of which will be collected by the end of first quarter. Bad debts are negligible and can be ignored.
3. The company desires an ending inventory of finished units on hand at the end of each quarter equal to 30% of the budgeted sales for the next quarter. On December 31, Year 1, the company had 12,000 units on hand.

1. 4. Six pounds of raw materials are required to complete one unit of product. The company requires an ending inventory of raw materials on hand at the end of each quarter equal to 10% of the production needs of the following quarter. On December 31, Year 1, the company had 23,000 pounds of raw materials on hand.
   5. The raw material costs $0.80 per pound. Purchases of raw material are paid for in the following pattern: 60% paid in the quarter the purchases are made, and the remaining 40% paid in the following quarter. On January 1, Year 2, the companys balance sheet showed $81,500 in accounts payable for raw material purchases, all of which will be paid for in the first quarter of the year
   6. PREPARE BUDGETS/SCHEDULES:
2. sales budget.
3. cash collections budget.
4. production budget.

5. Assumption
   0%	Desired Ending Inventory
   -	Starting inventory first quarter
   -	Desired Ending Inventory 4th qtr

   Budgeted Sales

   Add Desired ending inventory of finished goods

   Total Needs

   Less beginning inventory of finished goods

   Required production

6. direct materials budget.

7. Required production in units of finished goods (from production report)

   Units of raw materials needed per unit of finished goods

   Production needs (units)

   Add Desired units of ending inventory of raw materials

   Total units of raw materials needed

   Less units of beginning inventories of raw materials

   Units of raw materials to be purchased

   Unit cost of raw materials

   Cost of raw materials to be purchased

8. Percentage of purchases paid for in the period of the purchase	0%
   Percentage of purchases paid for in the period after the purchase	0%

9. Assumption
   0%	Desired ending inventory RM
   0	Pounds of Material per unit
   0	Cost per unit
   $0	Beginning AP
   -	Beginning RM
   -	Desired ending inventory for 4th quarter

10. Cash payments for purchases of materials schedule

11. Percentage of purchases paid for in the period of the purchase

    Percentage of purchases paid for in the period after the purchase

    Schedule of expected cash distribution for materials

    Accounts payable, beginning Balance

    First quarter purchases

    Second quarter sales

    Third quarter sales

    Fourth quarter sales

    Total cash disbursements for materials