Q # 2) ABC produces Goods for resale at throughout America. The company is currently in the process of establishing a master budget on a quarterly basis for this coming fiscal year, which ends December 31. Prior year quarterly sales were as follows; First quarter 14,000 units Second quarter 6,000 units Third quarter 8,000 units Fourth quarter 1,000 units Unit sales are expected to increase 20 percent, and each unit is expected to sell for $1. The management prefers to maintain ending finished goods inventory equal to 10 percent of next quarter's sales. Assume finished goods inventory at the end of the fourth quarter budget period is estimated to be 2,000 units. The beginning inventory was 1000 units. . Direct Materials Purchases Budget Information Each unit of product requires 1.5 pounds of direct materials per unit, and the cost of direct materials is $1 per pound. Management prefers to maintain ending raw materials inventory equal to 30 percent of next quarter's materials needed in production. Assume raw materials inventory at the end of the fourth quarter budget period is estimated to be 1,000 pounds. The beginning inventory was 2000 pounds . Direct Labor Budget Information Each unit of product requires 0. 1 direct Labor hours at a cost of $1 per hour. . Manufacturing Overhead Budget Information Variable overhead costs are; Indirect materials $0.10 per unit Indirect Labor $0.5 per unit Other $0.15 per unit Fixed overhead costs each quarter are: Salaries $8.000 Rent $2.000 Depreciation | $6,000 All sales are on credit. The company expects to collect 70 percent of sales in the quarter of sale, 25 percent of sales in the quarter following the sale, and 5 percent will not be collected (bad debt). Accounts receivable at the end of last year totalled $200,000, all of which will be collected in the first quarter of this coming year. All direct materials purchases are on credit. The company expects to pay 80 percent of purchases in the quarter of purchase and 20 percent the following quarter. Accounts payable at the end of last year totalled $50,000, all of which will be paid in the first quarter of this coming year. The cash balance at the end of last year totalled $20,000. Required: 1. Prepare a sales budget for ABC. 2. Prepare a production budget for ABC. 3. Prepare a direct materials purchases budget for ABC. 4. Prepare a direct Labor budget for ABC. 5. Prepare a manufacturing overhead budget for ABC