Problem 1 (7 points) Abrams Bottling Company sells fruit-flavored colas. Estimated sales in cartons for May, June, and July are 1,000, 3,000 and 5,000 respectively. The price is forecast at $5 per carton. Abrams requires that finished goods ending inventory be 20% of the next month's sales. Inventory was 500 units on May 1. Each carton requires 12 ounces of fruit syrup. Materials ending inventory is 10% of the next month's production needs. May 1 inventory met that requirement.

A. Budgeted revenue for May is _____________.(1 point)

B. Budgeted production in May is ___________ cartons. (2 points)

C. Budgeted purchases of syrup in May is ___________ ounces. (4 points)

Problem 2 (6 points) Byerly Corporation anticipates the following sales revenue over a five-month period:

Grading: 2 points for each correct total months cash collection; 1 bonus point for correct amount for quarter; half credit per month for relevant math shown.

	Nov	Dec	Jan	Feb	Mar
Sales Revenue	$18,000	$24,000	$28,000	$18,000	$21,000

Byerly Corporation's sales are 40% cash and 60% credit. The Byerly Corporation's collection history indicates that credit sales are collected as follows:

Month of sale	20%
Month after sale	50%
Two months after sale	25%
Uncollectible	5%

Required:

Prepare a cash collections budget for each month in the quarter (January, February, and March) and for the quarter in total.