Sweet as Sugar Company is a small manufacturing company. They manufacture the syrup used by snow cone vendors and summer is their busiest time. The information below pertains to the companys budgeting process. Their product is sold in one gallon containers alternatively referred to as gallons or units. Sweet as Sugar makes their product in a variety of fruit flavors, but budgets as if the products were all the same.

Budgeted sales in gallons (units) are as follows:

April	May	June	July	August
20,000	50,000	60,000	75,000	65,000

Each unit sells for $15.00.

All sales are on account. The companys collection pattern is: 70% of sales are collected in the month of sale; 30% are collected in the month following.

The company desires to have finished goods inventory on hand at the end of each month equal to 10 percent of the following months budgeted sales in units. On March 31, 2,000 units were on hand.

4 pounds of sugar are required for each gallon produced. The company desires to have materials on hand at the end of each month equal to 30 percent of the following months production needs. The requirement was met on March 31.

The sugar used in production costs $0.50 per pound. 60% of the months purchases are paid for in the month of purchase; the other 40% is paid for in the following month. No discount terms are available. The accounts payable as of March 31 were $12,000.

Each gallon requires 12 minutes of labor time to make (0.20 hours) and the hourly employees are paid $20/hour. Wages are paid in the month incurred.

Variable manufacturing overhead is $1 per unit produced

Fixed manufacturing overhead is $70,500 per month including $20,500 in depreciation that is not a current cash outflow.

All cash disbursements for manufacturing overhead are paid in the month incurred.

Variable selling and administrative expenses are $2.00 per unit sold.

Fixed selling and administrative expense is $70,000 per month including $10,000 in depreciation that is not a cash outflow of the current month.

All cash disbursements for selling and administrative costs are paid in the month incurred.

Cash dividends in the amount of $51,000 are to be paid to shareholders in April. These dividends were declared in March.

Sweet as Sugar borrowed $100,000 on March 31 as they normally need a lot of working capital to support the summer sales. Interest payments of $500 (6% rate) are made on the last day of each month.

Additionally, Sweet as Sugar has the following balance sheet as of March 31, 2018.

Assets			Liabilities and Equities
Cash	$140,000		Accounts payable	$12,000
Accounts Receivable	80,000		Notes Payable	$100,000
Raw materials inventory	13,800		Interest payable	0
Finished goods inventory	14,000		Dividend payable	51,000
Property, Plant and equipment, net	320,000		Common Stock	150,000
Total assets	$567,800		Retained earnings	254,800
			Total Liabilities and equities	$567,800

The Company uses variable costing in its budgeted income statement and its balance sheet.