The ABC Company manufactures and sells a seasonal product that has peak sales in the third quarter. The following information concerns operations for year 2 - the coming year and for the first two quarters of year 3 a. The company's single product sells for BD: 10 per unit. Budgeted sale in units for the next six quarters are as follows ( sales are on credit) Year 2 quarter year 3 quarter 1 2 3 4 1 2 Budgeted unit sales ----- 50000 75000 120000 60000 80000 90000 b. Sales are collected in the following pattern : 75% in the quarter the sales are made, and the remaining 25% in the following quarter. On January 1, year 2, the Compnay's balance sheet showed BD: 70000/- in accounts receivable, all of which will be collected in the first quarter of the year. Bad debts are negligible and can be ignored. C. The company desires an ending finished goods inventory at the end of each quarter equal to 35% of the budgeted unit sales for the next quarter. On December 31, year 1 the company had 14,000 units on hand. d. Six pounds of raw materials are required to complete one unit of product. The company requires ending raw materials inventory at the end of each quarter equal to 10% of the following quarter's production needs. On December 31, Year 1, the company had 24,000 pounds of raw materials on hand. e. The raw material cost BD:0.900 per each. Raw materials purchases are paid in the following pattern: 60% paid in the quarter the purchase are made, and the remaining 40% paid in the following quarter.On January 1, year 2, the company's balance sheet showed BD: 80000 in Accounts payable for raw material purchases, all of which will be paid for in the first quarter of the year. Required Prepare the following budgets and schedules for the year, showing both quarterly and total figures 1. A sales Budgets and schedule of expected cash collections (20 marks) 2. A production Budget (10 marks) 3. A direct materials budget and a schedule of expected cash payments for purchase of materials. (20 marks) 4. The principle purpose of cash budget is to see how much cash the company will have in the bank at the end of the year". Do you agree ? Explain. (10 marks)