The accounting team at Swifty Corp. plans to get a jump-start on its budget for the second quarter, since the first quarter is going well. Team members want to make sure to determine the cash effects of the company's sales as well as its biggest production-related cash expenditure, direct materials. The team has gathered the following information: The budgeted selling price for the year is $2.20 per unit. Sales volumes are budgeted as follows for the last month of quarter 1, for all of quarter 2, and for part of quarter 3. March April May June July August 23,300 20,400 24,900 25,600 26,300 22,400 2. 3. 4. 5. Historically, 25% of Swifty's sales are cash sales. Of the remaining credit sales, 40% are collected in the month of sale, while 56% are collected the following month. The remainder is deemed uncollectible. Management sets its ending FG Inventory goal at 10% of the following month's sales volume. The accounting team expects this policy will be met at the beginning of the second quarter. The target ending inventory for Swifty's primary direct material is 20% of the following month's production needs, since it's not unusual for suppliers to stock out of this key resource. Each completed unit requires 4 pounds of DM at an expected cost of $0.20 per pound. Swifty pays for 35% of its purchases in the month of purchase and 65% the month after purchase. Total budgeted purchases in March are $16,900. For all quarterly budgets, report monthly amounts as well as the total for the quarter. Production Budget April Budgeted Sales Volume Add V Target Ending FG Inventory Total Units Needed 20400 2490 22890 May 24900 2560 27460 Less Beginning FG Inventory 23300 2490 i Budgeted Units to be Produced V 20560 DM Purchases Budget April Beginning DM Inventory (Pounds) Budgeted Pounds of DM to be Purchased Budgeted Units to be Produced 20560 24970 May 24970 4 82240 99880 Add : Target Ending DM Inventory (Pounds) 19976 20536 April April 20400 2490 22890 places, e.g. 15.25.) May 24900 2560 27460 June 25600 Quarter 70900 2630 7680 28230 78580 23300 2490 i 2560 i 7380 20560 20560 4 82240 24970 May 24970 June 25670 25670 4 99880 102680 Quarter 71200 C A 71200 284800 4 Q Ad Qu Acc 19976 20536 20728 61240 Qu DM Cost per Pound Less Pounds of DM Der Unit Total Budgeted Cost of DM Purchases Total Production Needs (Pounds) Total DM Inventory Needs (Pounds) SA 69 102216 120416 18640 19976 83576 .20 100440 $ .20 16715.2 $ SA 20088 19976 20536 20728 61240 102216 18640 83576 .20 16715.2 120416 19976 i 100440 $ .20 $ SA EA 20088 tA $ 123407 20536 - 102872 .20 20574.4 346040 286888 .60 57377.60