month invoiced, 50% will be paid in the following month, and 30% of invoices will be paid two months after the month of invoice. The average selling price per skateboard is $450. To meet demand, SKATE, Inc. increases production from April through July, because the skateboards are produced a month prior to their projected sale. Direct materials are purchased in the month of production and are paid for during the following month (terms are payment in full within 30 days of the invoice date). During this period there is no production for inventory, and no materials are purchased for inventory. Direct manufacturing labor and manufacturing overhead are paid monthly. Variable manufacturing overhead is incurred at the rate of $7 per direct manufacturing labor-hour. Variable marketing costs are driven by the number of sales visits. However, there are no sales visits during the months studied. SKATE, Inc., also incurs fixed manufacturing overhead costs of $5,500 per month and fixed nonmanufacturing overhead costs of $2,500 per month. Projected Sales May 80 units August 100 units June 120 units September 60 units July 200 units October 40 units Direct Materials and Direct Manufacturing Labor Utilization and Cost: The beginning cash balance for July 1,2022 , is $10,000. On October 1,2021 , SKATE had a cash problem and borrowed $30,000 on a 6% one-year note with interest payable monthly. The note is due October 1,2022 . Using the information provided, you will need to determine whether SKATE will be in a position to pay off this short-term debt on October 1,2022. 1. Prepare a cash budget for the months of July through September 2022. Show supporting schedules for the calculation of receivables and payables. 2. Will SKATE, Inc. be in a position to pay off the $30,000 one-year note that is due on October 1,2022? month invoiced, 50% will be paid in the following month, and 30% of invoices will be paid two months after the month of invoice. The average selling price per skateboard is $450. To meet demand, SKATE, Inc. increases production from April through July, because the skateboards are produced a month prior to their projected sale. Direct materials are purchased in the month of production and are paid for during the following month (terms are payment in full within 30 days of the invoice date). During this period there is no production for inventory, and no materials are purchased for inventory. Direct manufacturing labor and manufacturing overhead are paid monthly. Variable manufacturing overhead is incurred at the rate of $7 per direct manufacturing labor-hour. Variable marketing costs are driven by the number of sales visits. However, there are no sales visits during the months studied. SKATE, Inc., also incurs fixed manufacturing overhead costs of $5,500 per month and fixed nonmanufacturing overhead costs of $2,500 per month. Projected Sales May 80 units August 100 units June 120 units September 60 units July 200 units October 40 units Direct Materials and Direct Manufacturing Labor Utilization and Cost: The beginning cash balance for July 1,2022 , is $10,000. On October 1,2021 , SKATE had a cash problem and borrowed $30,000 on a 6% one-year note with interest payable monthly. The note is due October 1,2022 . Using the information provided, you will need to determine whether SKATE will be in a position to pay off this short-term debt on October 1,2022. 1. Prepare a cash budget for the months of July through September 2022. Show supporting schedules for the calculation of receivables and payables. 2. Will SKATE, Inc. be in a position to pay off the $30,000 one-year note that is due on October 1,2022