Question No 1: (a) The production department of Priston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year. Quarter 01 6,000 Year Quarter 02 Quarter 03 7,000 8,000 Quarter 04 5,000 Budgeted production Each unit requires three pounds of raw material that costs $2.50 per pound. Management desires to end each quarter with a raw materials inventory equal to 20% of the following quarter's production needs. The desired ending inventory for the 4th Quarter is 3,700 pounds. In addition, the beginning raw materials inventory for the 1st Quarter is budgeted to be 3,600 pounds. Requirements: (Marks 5) Prepare the company's direct materials purchase budget. At the bottom of your budget, show the dollar amount of purchases for each quarter. (b) Peak sales for Midwest Products, a wholesale distributor of leaf rakes, occur in August. The company's sales budget for the third quarter showing these peak sales is given below: July August September (on $600,000 $900,000 5,00,000 Total $2,000,000 sales Budgeted account) From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled $430,000, and June sales totaled S540,000. Requirement: (Marks 5) Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter