PROBLEM A-SALES BUDGET Sales volume for the year 2017 has been estimated for Queennie Apparels as follows: Quarters Products Dresses Shirts Pants First 18,000 32,000 46,000 Second 21,000 35,000 49,000 Third Fourth Total 24,000 31,000 43,000 20,000 29,000 40,000 83,000 127,000 178,000 Selling prices for these products are: Shirts P65; Dresses P100; Pants P180. An estimated 5% of sales is expected for sales returns and allowances. 80% of sales are on account and 20% is cash sales. 75% of credit sales is collected in the same quarter of the sale while 25% is collected in the following quarter. Required: Prepare a sales budget for the year 2017 with a schedule of expected cash collections. PROBLEM B-PRODUCTION BUDGET The TESS Company has budgeted sales for the year as follows: Sales in units Quarter 1 10,000 Quarter 2 12,000 Quarter 3 14,000 Quarter 4 16,000 The ending inventory of finished goods for each quarter should equal 25% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 2,500 units. Four pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year total 4,200 pounds. The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs in material. Required: 1. How many units should be produced in the third quarter? 2. How many pounds of materials should be purchased for the second quarter?