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Master Budgeting Problem 8-A* 30. The following relates Swift Company is preparing budgets for the quarter ended June 30. The following to the company's budgets: Budgeted sales, in units, for the next five months are: 70,000 60,000 50,000 June March (actual) 20,000 March (actual) June 20,000 40,000 July July April 60,000 August May The selling price of the company's product is $10 for the calendar year. The company would like the following budgets prepared for the second quarter: Sales (with schedule of cash collections) All sales are on account. The company's collection pattern is: 60% collected in the month of sale; 35% collected in the month following sale; the remaining 5% is uncollectible. Production The company desires to have inventory on hand at the end of each month equal to 30 percent of the following month's budgeted sales in units. On March 31, 12,000 units were on hand. Materials purchases (with cash payments) Five pounds of material are required per unit of product. Each pound costs the company $0.60. The company desires to have materials on hand at the end of each month equal to 10 percent of the following month's production needs. This requirement was met on March 31. Purchases for the month of March amounted to $90,000. The company pays for its materials: 50% in the month of purchase and 50% in the month following the purchase. Required (using an electronic spreadsheet) 1) Prepare five budgets (Sales, Cash collections, Productions, Materials purchases, and Cash payments) for the quarter ended June 30. 2) Assume that Sales will increase 10% for each month, beginning April 1, and prepare a second set of budgets. (Note: Accounts Receivable and Accounts Payable balances, for first month, remain the same for both spreadsheets.)