Payne Company's management asks you to prepare its master budget using the following information. The budget is to cover the months of April, May, and June 2017. PAYNE COMPANY Balance Sheet Cash AR Assets $ 50,000 175,000 March 31, 2017 Liabilities AP $ 63,818 Short-term note payable 12,000 Raw Material Inventory 30,798* FG Inventory 96,600** Total Current Assets $352,398 Total Current Liabilities $ 75,818 Equipment 480,000 Long-term note payable 200,000 Less: Accumulated Depreciation (90,000) Total Liabilities Equipment (net) 390,000 Common Stock 275,818 Total Assets Retained Earnings 435,000 Total Stockholder's Equity 31,580 466,580 Total Assets Total Liabilities & Equity $742,398 $742,398 *2,425 pounds @ $12.70/lb (rounded to nearest $) **8,400 units @ $11.50 per unit Additional Information a. Sales for March total 10,000 units. Expected sales (in units) are: 10,500 (April), 9,500 (May), 10,000 (June), and 10,500 (July). The product's selling price is $25 per unit. b. Company policy calls for a given month's ending finished goods inventory to equal 80% of the next month's expected unit sales. The March 31 FG inventory is 8,400 units which complies with the 80% policy. The product's manufacturing cost is $11.50 per unit, including per unit costs of $6.35 for materials (0.5lbs. @ $12.70/lb. $3.75 for DL (0.25 hours * $15 DL rate per hour). $0.90 for Variable MOH and $0.50 for Fixed MOH. Fixed MOH consists entirely of $5,000 of monthly depreciation expense. Company policy also calls for a given month's ending raw materials to equal 50% of next month's expected materials needed for production. The March 31 inventory is 2,425 units (lbs) of materials which complies with company policy. The company expects to have 2.100 units of material inventory on June 30.