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Swordfish Golf Balls, Inc. produces a long distance golf ball called the Hot Shot. The Hot Shot is advertised to travel 250 yards when hit

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Swordfish Golf Balls, Inc. produces a long distance golf ball called the "Hot Shot". The "Hot Shot" is advertised to travel 250 yards when hit well by the average weekend golfer and far longer when hit by low handicap golfers. The ball has been very popular and sales have been tremendous since being released in the last quarter of the current calendar year 20X5. The company is now trying to budget for next year's operations. The sales of balls for the last quarter of 20X5 were 240,000 balls, selling at $2.50 per ball. Swordfish expects that sales of the "Hot Shot" golf ball will increase 5% each quarter, starting with the beginning of the first quarter of 20X6. The price will remain at $2.50 per ball until the beginning of the third quarter when increases in the price of raw materials will require a 10% increase in price. This price will remain in effect for the rest of the year. 80% of the company's sales of golf balls are on credit with the remaining 20% for cash. The company normally collects 85% of its credit sales in the quarter of sale and the remaining 15\% in the quarter following sales. Uncollectible accounts are negligible. Swordfish likes to produce just enough golf balls to cover its current quarter sales. However, it does not want to run short of golf balls, so it has decided to maintain an inventory of 20% of the next quarter's sales. This is the ending inventory policy that was in effect at the end of the last quarter of 20X5. The company marks up its golf balls 150% on the cost of production and this policy will continue throughout 20X6. 60% of the cost of producing a golf ball is raw materials. The company purchases all raw materials in the quarter before they are needed for production and pays for them the quarter following purchase. The company has the attached expenses each month. In addition, the company prepays its insurance of $24,000 for the entire year on January 2 of each year and then expenses it evenly over the appropriate accounting periods. All other expenses are paid for in the month they are incurred. The company also expects to purchase $10,000 of capital equipment on January 2 of the current year, the depreciation on which is reflected in the depreciation expense provided above. (1) Using the attached form, prepare a sales budget for the company by quarter and in total for the upcoming year. Prepare the budget in both units and sales dollars. Round all calculations to the nearest unit, nearest cent for price per unit, and whole dollar for all other dollar amounts. (2) Using the attached form, prepare a production budget for the company by quarter and in total for the upcoming year. Prepare the budget in both units and dollars of cost. Round all calculations to the nearest unit, nearest cent for price per unit, and whole dollar for all other dollar amounts. (3) Using the attached form, prepare a budgeted income statement for the company by quarter and in total for the upcoming year. Round all calculations to the nearest whole dollar

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