Ride-Out sales are highest in the spring and summer months, when private consumer purchases peak. The most profitable months are always March to May, when outdoor adventure stores are preparing for the summer season.

This past summer was a difficult one. Due to poor weather across the region, annual sales last year dipped 4% over the prior three-year average. Fortunately, there is no indication that the bad weather will repeat this year.

Month Units sold

January 74

February 90

March 210

April 240

May 255

June 205

July 180

August 160

September 90

October (forecast) 85

November (forecast) 70

December (forecast) 65

Power-Ride had a one-time special order in April for 15 Ride-Outs that is not expected to occur this upcoming year. One of Power-Ride's retailers, Outfitters Inc., recently closed. It accounted for 5% of regular sales for January to March, and 8% of regular sales for the remainder of the year. The Ride-Outs currently sell for $1,400 per unit, and the company is planning to increase the selling price by 5% for the coming year.

Market research shows that two-wheeled personal transportation vehicles are gaining popularity with those who live in hilly or windy areas and those with reduced fitness levels. As a result, experts are predicting that sales growth in this market will be at least 6% in the coming year. Power-Ride requires inventories of finished goods on hand at the end of each month to be equal to 50% of the following month's budgeted sales. Power-Ride expects to have 20 units on hand on December 31, 2019.

You have completed the budgets for the production inputs for 2020, summarized below. January February March April May June Direct materials $30,624 $50,945 $75,547 $76,000 $63,230 $50,584 Direct labour $30,019 $49,940 $74,055 $74,499 $61,981 $49,585 Manufacturing overhead $12,615 $20,986 $31, 120 $31,307 $26,046 $20.837 July August September October November | December Direct materials $41,678 $32,772 $29,923 $27,608 $23,867 $22,528 Direct labour $40,855 $32,126 $29,332 $27,062 $23,395 $22,083 Manufacturing overhead $17,169 $13,500 $12,326 $11,372 $ 9,832 $ 9,280 The cost per unit of the open inventory in January is expected to be $705 per unit. You were also provided with the following to use for the selling and administrative budget. Prior-year monthly expense information and assumptions: Shipping costs $45 per unit (no expected change) Wages and salaries $20,000 expected to increase by 3% inflation only at the beginning of the year and then remain constant Depreciation $8,200 expected to stay the same Utilities $7,100 expected to increase by 3% in February and then remain constant Insurance $4,100 expected to increase by 2% on renewal in April and then remain constant Miscellaneous $2,900 expected to stay the same a) Prepare the monthly cost of goods sold budget for 2020. b) Prepare the monthly selling and administrative expenses budget for 2020. c) Prepare the annual budgeted net income statement for 2020, ignoring income taxes based upon the information provided.You have completed the budgets for the production inputs for 2020, summarized below. January February March April May June Direct materials $30,624 $50,945 $75,547 $76,000 $63,230 $50,584 Direct labour $30,019 $49,940 $74,055 $74,499 $61,981 $49,585 Manufacturing overhead $12,615 $20,986 $31, 120 $31,307 $26,046 $20.837 July August September October November | December Direct materials $41,678 $32,772 $29,923 $27,608 $23,867 $22,528 Direct labour $40,855 $32,126 $29,332 $27,062 $23,395 $22,083 Manufacturing overhead $17,169 $13,500 $12,326 $11,372 $ 9,832 $ 9,280 The cost per unit of the open inventory in January is expected to be $705 per unit. You were also provided with the following to use for the selling and administrative budget. Prior-year monthly expense information and assumptions: Shipping costs $45 per unit (no expected change) Wages and salaries $20,000 expected to increase by 3% inflation only at the beginning of the year and then remain constant Depreciation $8,200 expected to stay the same Utilities $7,100 expected to increase by 3% in February and then remain constant Insurance $4,100 expected to increase by 2% on renewal in April and then remain constant Miscellaneous $2,900 expected to stay the same a) Prepare the monthly cost of goods sold budget for 2020. b) Prepare the monthly selling and administrative expenses budget for 2020. c) Prepare the annual budgeted net income statement for 2020, ignoring income taxes based upon the information provided