Problem 14.25 LO 4,5,7 Sales, production, purchases, and cash budgets Soprano Co. is in the process of preparing the second quarter badget for 2019, and the following data have been assembled: The company sells a single product at a selling price of $40 per unit. The estimated sales volume for the next vix months is as Page 557 follows: March 6,000 units June 8,000 units April 7,000 units July 9,000 units May 10,000 units August 6,000 units All sales are on account. The company's collection experience has been that 40 % of a month's sales are collected in the month of sale, 55% are collected in the month following the sale, and 5% are uncollectible. It is expected that the net realizable value of accounts receivable (i.e., accounts receivable less allowance for uncollectible accounts) will be $132,000 on March 31, 2019 Management's policy is to maintain ending finished goods inventory cach month at a level cqual to 50% of the next month's budgeted sales. The finished goods inventory on March 31, 2019, is expccted to be 3,500 units. To make one unit of finished product, three pounds of materials are required. Management's poliey is to have enough materials on hand at the end of cach month to equal 40 % of the next month's estimated usage. The raw materials inventory is expected to be 10,200 pounds The cost per pound of raw material is $6, and S0% of all purchases are paid for in the month of purchase, the remainder is paid in the following month. The accounts payable balance for raw material purchases is expected to be $26,280 on March 31, 2019 on March 31, 2019 Required: a. Prepare a sales budgect in units and dollars, by month and in total, for the second quarter (April, May, and June) of 2019 ILOCa.oom/a/epub/sn ebd9etepubcfi(62F6 % 2F346%SBdata-uuid - 0f58413c831c4d3fb49e7fec964cada19%5D % 2F4 % 252%58dal follows March 6,000 unita June 8,000 April 7,000 units July 9,000 May 10,000 units Augunt 6,000 units All sales are on account. The company's collection experience has been that 40 % of a month's sales are collected in the month of sale, 55% are collected in thc month following the sale, and 5 % are uncollectible. It is expected that the nct realizable value of accounts receivable (i.c., accounts receivable less allowance for uncollectible accounts) will be $132,000 on March 31, 2019 Management's policy is to maintain ending finished goods inventory cach month at a level equal to 50% of the next month's budgeted sales. The finished goods inventory on March 31, 2019, is expected to be 3,500 units. To make one unit of finished product, three pounds of materials are required. Management's policy is to have cnough materials on hand at the end of each month to cqual 40 % of the next month's estimated usage. The raw materials inventory is expected to be 10,200 pounds on March 31, 2019. The cost per pound of raw material is $6, and 80 % of all purchases are paid for in the month of purchase; the remainder is paid in the material purchases is expected to be $26,280 on March 31, 2019. following month. The accounts payable balance for raw Required: a. Prepare a sales budget in units and dollars, by month and in total, for the second quarter (April, May, and June) of 2019. b. Prepare a schedule of cash collections from sales, by month and in total, for the second quarter of 2019. Prepare a production budget in units, by month and in total, for the second quarter of 2019. c. d. Prepare a materials purchases budget in pounds, by month and in total, for the second quarter of 2019. e. Prepare a schedule of cash payments for materials, by month and in total, for the second quarter of 2019