Problem #1 Budgeting Dixon Corporation has the following sales budget for September-January: Sept Oct Nov Dec Jan Sales Revenue $80,000 $100,000 $120,000 $90,000 $110,000 Required: 1. The company's inventory policy is to keep sufficient ending inventory on hand to cover 40% of next month's sales. Selling price per unit is $10. Complete the following production budget for September, October, November and December. September October November December Unit Sales End Inventory Beg. Inventory (given for September) 3,200 Units to Produce 2. Four pounds of materials are required for each unit produced. Ending inventory levels for raw materials are 25 % of next month's production needs. Cost of one pound of material is $1.50. Based on this information and your production schedule from above, complete the following material purchase budget for September and October. September October Pounds of Material Needed for Production End. Inv. 8,800 Beg. Inv. (given for September) Pounds to Purchase Cost per Pound Total Purchase CostThe sales forecasts om the previous page has been reproduced below: m- $80 000 $100 000 $120 000 $90 000 $110 000 20% sales are cash sales. Approximately 10% of credit sales are never collected. The collectible portion of credit sales are collected as follows: 70% in the month of the sale 30% in the month following the sale Dixon pays for 60% of direct material purchases during the month of purchase and the remainder the following month (use purchases budget from previous page). All other cash payments are paid during the month incurred, as follows: Direct Labor costs $3 per unit produced Fixed manufacturing overhead $25,000 (including $15,000 in depreciation) Sales commissions 10% of sales revenue Fixed administrative salaries $ 41000 The company will borrow any funds necessary to maintain a minimum cash balance of $10,000. If the rm develops cash shortage by the end of the month, sufcient cash is borrowed to cover the shortage. 3. in the space provided below, complete Dixon's cash budget for the month of October and indicate how much (if any) nancing is required. I Beinnin Cash 9130 40 000 Cash Collections: Cash Payments: I Preliminary Cash Balance - Financing Required - Ending Cash Balance