Question 4 sales Unit sales for May 2021 Unit sales for June 2021 Expected unit sales for July 2021 Expected unit sales for August 2021 112,500 102,100 113,000 112,500 Expected unit sales for September 2021 116,000 Expected unit sales for October 2021 125,000 Expected unit sales for November 2021 137,500 Unit selling price $12 Pearson's Inc is preparing its budget for the third quarter of 2022 (July to September). The company has gathered information from its managers in preparation of the budgeting process. Production The company likes to keep 10% of the next month's unit sales in ending inventory. Cash Collections All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on June 30, 2021, totaled $183,780. Direct Materials Direct materials cost $0.75 per pound. Two pounds of direct materials are required to produce each unit. Pearson's Inc likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on June 30, 2021 totaled 11,295 pounds. Desired ending direct materials on September 30, 2021 is 12,625 pounds. Direct Materials - Disbursements Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on June 30, 2021, totaled $120,595. Direct Labor Labor requires 12 minutes per unit for completion and is paid at a rate of $8 per hour. Manufacturing Overhead Indirect materials Indirect labor Utilities Maintenance 30 per labor hour 50 per labor hour 45 per labor hour Salaries Depreciation Property taxes Insurance: Janitorial 25 per labor hour $42,000 per month $16,800 per month $ 2,675 per month $ 1,200 per month $1,300 per month Selling and Administrative Variable selling and administrative cost per unit is $1.60. Fixed selling and administrative costs are as follows: Advertising Insurance Salaries Depreciation Other fixed costs $15,000 a month $ 1,400 a month $72,000 a month $2,500 a month $3,000 a month Production budget. a. Sales budget. b. C. Direct materials budget. (Round to nearest dollar) d. Direct labor budget. (For calculations, round to the nearest hour) Manufacturing overhead budget. (Round amounts to the nearest dollar) e. f. Selling and administrative budget. g. Schedule for expected cash collections from customers. h. Schedule for expected payments for materials purchases. (Round totals to nearest dollar)