Prepare a master budget for Optima Company for each quarter of 20X1 and for the year in total. The following component budgets must be included:

Sales budget

Production budget

Direct materials purchases budget

Direct labor budget

Overhead budget

Selling and administrative expenses budget

Ending finished goods inventory budget

Cost of goods sold budget (Note: Assume that there is no change in work-in-process inventories.)

Cash budget

Pro forma income statement (using absorption costing) (Note: Ignore income taxes.)

Pro forma balance sheet (Note: Ignore income taxes.)