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Problem 1 - Master Budget (30 points) ABC Company makes bookstands and expects the following sales and cash collections for the first three months of 2019 January February March Sales in # Of Bookstands 6,400 5,200 7,400 Revenue in Dollars $128,000 $104,000 $148,000 Cash Collections $123,000 93,000 $140,000 Sales for April and May are expected to be 8,000 bookstands per month The following balances were taken from the December 31, 2018 balance sheet: Cash, $18,320; Raw Material Inventory, $8,230; Finished Goods Inventory, $23,200; and Accounts Payable, $5,800. The Raw Material Inventory balance consists of 1,580 pounds of scrap iron and 1,200 bookstand bases. The Finished Goods Inventory consists of 1,220 bookstands. Each bookstand requires two pounds of scrap iron, which costs $3 per pound. Each bookstand requires one bookstand base which cost $2.50 per unit. Beginning in 2019, management has decided that the ending inventory of raw materials should be 25% of the following month's production requirements. Management has also decided that the ending balance in Finished Goods Inventory should be 20% of the next month's sales The company pays for 75% of a month's purchases of raw materials in the month of purchase. The remaining 25% is paid in the month following purchase. Direct labor is budgeted at $0.70 per bookstand produced and is paid in the month of production Total cash manufacturing overhead is budgeted at $14,000 per month plus $1.30 per bookstand. Total cash selling and administrative costs equal $13,600 per month plus 10% of sales revenue. These costs are al paid in the month of incurrence. In addition, the company plans to pay executive bonuses of $35,000 in January of 2019 and make an estimated quarterly tax payment of $5,000 in March of 2019 Management requires a minimum cash balance of $10,000 at the end of each month. If the company borrows funds, it will do so only in $1,000 multiples at the beginning of a month at a 12% interest when a repayment is made Interesti