Reno Manufacturing Inc. produces control valves used in the production of oil field equipment. The control valves are sold to various gas and oil engineering companies throughout the United States. Projected sales in units for the coming year are as follows:

MONTH UNITS January 25,000 February 30,000 March 20,000 April 40,000 May 30,000 June 10,000 July 20,000 August 10,000 September 12,000 October 20,000 November 30,000 December 35,000

The following data pertain to production policies and manufacturing specifications followed by Reno's Managers and Managerial Accounting team:

a. 20% of revenues are collected in cash, whereas the remainder is on account. Accounts Receivable collections are estimated to be 30% in the month of the sale and 70% in the month following the sale.

b. The desired ending inventory for each month is 60% of the next months sales. Finished goods beginning inventory is consistent with this policy.

c. The data on materials used are as follows:

Direct Material: part 501

Part Cost: $8

Parts per unit: 3

d. Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 40% of the next months estimated production (ie. the 3/31 inventory balance should be 40% of April's estimated production). Raw materials inventory is consistent with this policy. Direct materials are paid 40% in the month of purchase and 60% in the month following. The Accounts Payable balance on April 1 is $472,320.

e. The direct labor used per unit of output is four hours at an expected cost of $22 per hour.

f. The unit selling price is $175 per valve.

REQUIRED: Prepare a monthly operating budget for April with the following schedules:

1. Revenue Budget, including Collections, and Accounts Receivable

2. Production Budget

3. Direct Materials Purchases Budget, including Payments

4. Direct Labor Budget