Problem 2 (budget) The Miller Company manufactures and sells a product whose demand is seasonal. By, the company's sales were higher in the third quarter of 2019.

The product manufactured by the Miller company sells for $ 8 per unit. Forecast sales for the next six quarters are as follows:

1st quarter 2019: 40,000 units 2nd quarter 2019: 60,000 units 3rd quarter 2019: 100,000 units 4th quarter 2019: 50,000 units 1st quarter 2020: 70,000 units 2nd quarter 2020: 80,000 units

2) The sales are managed as follows: 75% in the quarter in which the sales are made and the balance of 25% in the following quarter. As of January 1, 2019, the company's balance sheet showed accounts receivable of $ 65,000, all of which were collected in the first quarter of 2019. There are no bad debts.

3) The business requires an inventory of finished goods at the end of each quarter equal to 30% of budgeted sales for the following quarter. The finished product inventory at the end of 2018 totaled 12,000 units.

4) 5 kilograms of raw materials are required to complete a unit or product. The company must maintain a stock equivalent to 10% of the production of the following quarter. This requirement was met on December 31, 2018 since the company had 23,000 kilograms of raw materials on hand to start 2019.

5) The raw material costs $ 0.80 or 80 cents per kilogram. The first purchases of materials are paid as follows: 60% is paid in the quarter in which the purchases are made and the balance of 40% is paid in the following quarter. As of January 1, 2019, accounts payable on the company's balance sheet amounted to $ 81,000. This amount was to be paid in full during the first quarter of 2019.

Work to do :

Prepare the following budgets and schedules for the year 2019 quarterly and for the entire year

1. A sales budget and a schedule or plan of expected cash receipts. What will be the balance of accounts receivable as of December 31, 2019? 2. A production budget in units. 3. A raw materials budget and a schedule or plan of expected disbursements for raw materials. What will the accounts payable balance be as of December 31, 2019?

4. What additional budgets would you need in order to prepare the forecast income statement?