Operating Budget, Comprehenstve Anatysis Panderdis, Inc. produces, wiring harnesis assemblies used in the production of semi-traiker trucks, The wiring harness assemblies are sold to various truck. manufacturers around the world. Projected sales in units for the coming five months are given below. The following dota pertain to production policies ond manufacturing specincations followed by ponderosa: 3. Finished goods inventory on January 1 is 900 units. The desired ending inventocy for each month is 20 percent of the-next monthir sales. b. Thet data on materials used are as follows: Inventory pobcy dictates that ouficient materials be on hand at then beginning of the month to satisfy 30 percent of the next manthi production neidi. This is exoctly the amount of materiat on band on Januory 1 c. The direct laber used per unit of output is one and one-halt nours. The averape direct abor cost per hour is 320 . d: overneod egch month is eitmmated using a fersibie budget formula. (Actwity is measired in direct labor hours.) Inventary policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next months production needs. This is exactly the amount of material on hand on January 1. c. The direct labor used per unit of output is one and one-haif hours. The average direct labor cost per hour is 520 . d. Overhead each month is estimated using a floxible budaet formula. (Activity is measured in direct labor hours.) t. The unit seling price of the wiring harness assembly is $110. 9. In February, the company plans to purchose land for future expansion, Thie land costs 568,000 . h. All sales and purchaces are for cesh. The cash balance on January 1 equals $62,800. The fim wants to heve an ending cash bolance or at least 525,000 . If a cath shortage develops, sumbent cash is borrowed to cover the shortage and provide the desired ending balance. Any cosh borrowed must be borrawed in $1,000 increments and is repald the following month, as is the interest due. The interest rate is 12 percent per annum. Required: Prepare a monthly operating budget for the first quarter with the following schedules: 1. Sales budoet