Pharoah Company is preparing its master budget for 2020. Relevant data pertaining to its sales, production, and direct materials budgets are as follows. Sales. Sales for the year are expected to total 2,000,000 units. Quarterly sales are 21%, 27%, 23%, and 29%, respectively. The sales price is expected to be $38 per unit for the first three quarters and $47 per unit beginning in the fourth quarter. Sales in the first quarter of 2021 are expected to be 15% higher than the budgeted sales for the first quarter of 2020. Production. Management desires to maintain the ending finished goods inventories at 20% of the next quarter's budgeted sales volume. Direct materials. Each unit requires 2 pounds of raw materials at a cost of $11 per pound. Management desires to maintain raw materials inventories at 10% of the next quarter's production requirements. Assume the production requirements for first quarter of 2021 are 510,000 pounds. Prepare the sales, production, and direct materials budgets by quarters for 2020.Annual Sales in units 2,000,000 Breakdown of Sales in units per quarter Expected Sales Q1 21% 420,000 Q2 - 27% 540,000 Q3 23% 460,000 Q4 29% 580,000 PHAROAH COMPANY Sales Budget Q1 Q2 Q3 Q4 Total Units Sold 420,000 540,000 460,000 580,000 2,000,000 Multiply by: Selling Price 38 38 38 47 Sales Revenue 15,960,000.00 20,520,000.00 17,480,000.00 27,260,000.00 81,220,000.00420,000*1.15*20%=96,600 Units sold for Q1 2020 * 115% * 20% desired finished goods ending PHAROAH COMPANY Production Budget Q1 Q2 Q3 Q4 Total Units Sold 420,000 540,000 460,000 580,000 2,000,000 Add: Desired Ending Finished Goods (20% of next quarter sales ) 108,000 92,000 116,000 96,600 Total Goods Available for Sale 528,000 632,000 576,000 676,600 2,412,600 Less: Finished Goods - Beginning (ending inventory of previous quarter ) 0 108,000 92,000 116,000 316,000 Required Units to be Produced 528,000 524,000 484,000 560,600 2,096,600Cost of Raw Materials Required for Production Required Units to be Produced Multiply by: Required pounds per unit Raw Materials Required for Production Multiply by: Cost per pound Cost of Raw Materials Required for Production Add: Cost of Desired Raw Materials Inventory 5 Ending Desired Raw Materials Inventory 5 Ending (10% ofnext quarter's required units to be produced] Multiply by: Cost per pound Cost of Desired Raw Materials Inventory , Ending Total Cost of Raw Materials Required Less: Cost of Beginning Inventory (ending inventory of the previous quarter] Cost of Raw Materials to be purchased PHAROAH COMPANY Direct Materials Budget Q1 Q2 Q3 Q4 Total 528,000 524,000 484,000 560,600 2,096,600 2 2 2 2 1,056,000 1,048,000 968,000 1,121,200 4,193,200 11 11 11 11 11,616,000.00 11,528,00000 10,648,000.00 12,333,20000 46,125,200.00 52,400 48,400 56,060 51000 207,860 2 2 2 2 104,800.00 96,800.00 112,120.00 102,000.00 415,720.00 11,720,800.00 11,624,800.00 10,760,120.00 12,435,20000'46,540,920.00 , 104,800.00 96,800.00 112,120.00 313,720.00 11,720,800.00 11,520,00000 10,663,320.00 12,323,08000 45,227,20000 510,000*lD/o=51,000 10% of next quarters's production requirements