Super Rich Business Person (SRBP) is opening a new merchandising company, COMPANY 2. SRBP owns several companies, but COMPANY 1 is very similar to COMPANY 2 (market size and characteristics, product types, expected demand/supply, etc.). Because the two companies are so similar, SRBP is going to use COMPANY 1 as a source of estimated prices and costs for COMPANY 2. COMPANY 1 has been in operation for seven years, and it's most recent Income Statement is presented below. Note that this income statement has been prepared especially for this purpose. SRBP's accountant prepared it to show both cost function AND cost behavior. COMPANY 1 Income Statement For the year ended 20X6 (Total Units = 2,500) Sales, Gross Sales Discounts Sales Returns & Allowances Sales, Net Cost of Goods Sold (variable) Gross Profit Variable Selling Expenses Variable Administrative Expenses Fixed Selling & Administrative Expenses Net Income 275,000 (2.000) (5.500) (7.500) 267,500 (165.000) 102,500 (19.250) (13,750) 43,250) (76,250) 26,250 A total of 2,500 units were sold at COMPANY 1 during the year. All sales accounts are variable in nature (Sales, Gross; Sales Discount; Sales Returns & Allowances; and Sales, Net). Based on the information given above, complete the following Master Budget requirements for COMPANY 2 (again, using the numbers for COMPANY 1 as estimates): 5. Assume COMPANY 2 sells 3,450 units in 20X7, prepare the Sales, Inventory Purchases, and Selling & Administration Expense budgets based on the following additional assumptions. a. Prepare the Master Budget for 20X7 (i.e., only one unit amount, 3,450 units). b. Use the Sales, Net price for budgeting purposes, this allows us to ignore the impact of Sales Discounts and Sales Returns & Allowances in the Master Budget. c. Assume that 90% of all Sales, Net will be received in cash during the year, the remainder will be Accounts Receivable. d. For Inventory Purchases, assume a Desired Ending Inventory amount of 400 units for 2017. Ignore discounts and return for the Master Budget. e. Assume that 85% of all purchases will be paid in cash during the year, the remainder will be Accounts Payable. f. All Selling (Marketing) and Administrative amounts can go in the same Expenditure Budget. This will include the variable amounts related to selling and administrative, as well as the fixed amounts