SALES SIk Company is preparing budgets for the quarter ending June 30. Budgeted sales for the next five months are: 20,000 unlts 30,000 units 60,000 units 50,000 units 60,000 units. Apri May June uly August AL Royal, each unit of product requires 0.5 hours of direct labor Workers agreed to a wage rate of $12 per hour regardless of the hours worked The selling price is $20 per unit M Royal Company uses a variable manufacturing overhead rate of $1 per unit DIRECT LABOR HOUR Fixed manufacturing overhead is $25,000 per month and includes $5,000 of noncash costs (primarily depreciation of COLLECTION Royal's collection pattern is: plant assets). At Royal, variable selling and administrative expenses are $1.00 per unit sold The fixed selling and administrative expenses include $10,000 in costs-primarily depreciation-that are not cash outflows 80% collected in the month of sale. 20% collected in the month following sale. Fixed selling and administrative expenses are $50,000 per month. The March 31 accounts receivable balance of $50,000 will be collected in full. of the current month PRODUCTION The management at Royal Company wants ending inventory to be equal to 10% of the following month's budgeted sales in units. On March 31, 8,000 units were on hand. CASHEUDGET Maintains a miaimum eash balance of $30,000 Has an April 1 cash balance o $400.00n DIRECT MATERIALS At Roval Company, 2 pounds of material are required per unit of product. Management wants materials on hand at the end of each month equal to 5% of the following month's production. On March 31, 8,000 pounds of material are on hand. Material cost is $0.40 per pound One-half of a month's purchases are paid for in the month of purchase; the other half is paid in the following month. The March 31 accounts oavable balance is $10,000