Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet as of April 30 is given below: The company is in the process of preparing a budget for May and has assembled the following data: a. Sales are budgeted at $275,000 for May. Or these soles, $82,500 will be for cash; the remainder will be credit sales, One-half of a month's credit sales are collected in the month the sales are made, and the remainder is collected in the following month. All of the April 30 accounts recelvable will be collected in Moy. b. Purchases of inventory are expected to total $214,000 during May. These purchases will all be on account. Forty percent of all purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the April 30 accounts payable to suppliers will be paid during May. c. The May 31 inventory balance is budgeted at $87,000. d. Selling and administrative expenses for May are budgeted at $81,300, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2.750 for the month. c. The note payable on the April 30 balance sheet will be paid during May, with $585 in interest. (All of the interest relates to May.) f. New refrigerating equipment costing $10,800 will be purchased for cash during May. 9. During May, the company will borrow $20,800 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year. Required: 1. Calculate the expected cash collections from customers for May. 2. Calculate the expected cash disbursements for merchandise purchases for May. 3. Prepare a cash budget for May. 4. Prepare a budgeted income statement for May. 5. Prepare a budgeted balance sheet as of May 31. Complete this question by entering your answers in the tabs below. 1. Calculate the expected cash collections from customers for May. 2. Calculate the expected cash disbursements for merchandise purchases for May. Required: 1. Calculate the expected cash collections from customers for May. 2. Calculate the expected cash disbursements for merchandise purchases for May. 3. Prepare a cash budget for May. 4. Prepare a budgeted income statement for May. 5. Prepare a budgeted balance sheet as of May 31. Complete this question by entering your answers in the tabs below. 1. Calculate the expected cash collections from customers for May. 2. Calculate the expected cash disbursements for merchandise purchases for May. Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no saies force of its own; rather, it relles completely on independent sales agents to market its products. These agents are paid a sales commission of 15% for ali items sold. Barbara Cheney. Pittman's controller, has just prepared the company's budgeted income statement for next year as follows: As Barbara handed the statement to Karl Vecci, Pittman's president, she commented, "I went ahead and used the agents' 15% commission rate in completing these statements, but we've just leamed that they refuse to handle our products next year unless wo As Barbara handed the statement to Karl Vecci, Pittman's president, she commented, "I went ahead and used the agents' 15% commission rate in completing these statements, but we've just learned that they refuse to handle our products next year unless we increase the commission rate to 20%." "That's the last straw," Karl replied angrily. "Those agents have been demanding more and more, and this time they've gone too far. How can they possibly defend a 20% commission rate?" "They claim that after paying for advertising, travel, and the other costs of promotion, there's nothing left over for profit," replied Barbara. "I say it's just plain robbery." retorted Karl. "And I also say it's time we dumped those guys and got our own sales force. Can you get your people to work up some cost figures for us to look at?" "We've already worked them up." said Barbara. "Several companies we know about pay a 7.5% commission to their own salespeople, along with a small salary. Of course, we would have to handle all promotion costs, too. We figure our fixed expenses would increase by $3,075,000 per year, but that would be more than offset by the $4,100,000(20%$20,500,000) that we would avoid on agents' commissions." The breakdown of the $3,075,000 cost follows: Balarlest The breakdown of the $3,075,000 cost follows: "Super," replied Karl. "And I noticed that the $3,075,000 equals what we're paying the agents under the old 15% commission rate." "It's even better than that," explained Barbara. "We can actually save $94,300 a year because that's what we're paying our auditors to check out the agents' reports. So our overall administrative expenses would be less." "Pull all of these numbers together and we'll show them to the executive committee tomorrow," said Karl, "With the approval of the committee, we can move on the matter immediately." Required: 1. Compute Pittman Company's break-even point in dollar sales for next year assuming a. The agents' commission rate remains unchanged at 15%. b. The agents' commission rate is increased to 20%. c. The company employs its own soles force. 2. Assume that Pittman Company decides to continue seling through agents and pays the 20\% commission rate. Determine the dollar sales that would be required to generote the same net income as contained in the budgeted income statement for next year. 3. Determine the dollar sales at which net income would be equal regardiess of whether Pittman Company selis through agents (at a sales that would be required to generate the same net income as contained in the buageted income statement for next year. 3. Determine the dollar sales at which net income would be equal regardless of whether Pittman Company sells through agents 20% commission rate) or employs its own sales force. 4. Compute the degree of operating leverage that the company would expect to have at the end of next year assuming: a. The agents' commission rate remains unchanged at 15%. b. The agents' commission rate is increased to 20%. c. The company employs its own sales force. Use income before income taxes in your operating leverage computation. Complete this question by entering your answers in the tabs below. Compute Pittman Company's break-even point in dollar sales for next year assuming: (Round CM ratio to 3 decimal places and final answers to the nearest dollar amount.)