The company has an exclusive right to sell LunaGlows and sales have been brisk.The Master Budget will be for the next three months starting April $1.$ The following information isavailable related to the budget.The company needs to maintain a minimum cash balance at the end of everymonth in the amount of $$15,000.$ The Glows are forecasted to sell at $$44$ each.Recent actual and projected sales $($in units$)$ are as followsActual Projected ProjectedJan $68,000$ Apr $119,000$ Jul $136,000$Feb $82,000$ May $153,000$ Aug $122,000$Mar $95,000$ Jun $204,000$ Sep $109,000$In order to meet the product demand, the company has established a policyrequiring that ending inventory for each month must be equal to $90\%$ of theunits expected to sold in the next month. The cost to purchase each unit of product is $$25.$Purchases are typically paid for as follows: $50\%$ paid in the month of purchase,and the remaining $50\%$ paid in the month after purchase. All sales are on credit,with no discount, and payable within $15$ days. The company's collections onaccount usually are $25\%$ in the month of sale, $50\%$ in the month immediatelyafter the sale, and $25\%$ in the second month after sale. The company hasa very rigorous credit policy and there are virtually no bad debts.The company's operating expenses are shown below:Variable:Sales Commissions $$4$ per unitFixed:Wages $$47,000$Utilities $1,600$Insurance expired $1,600$Depreciation $2,000$Miscellaneous $2,600$All operating expenses are paid during the month, in cash, with the exceptionof depreciation and insurance expired. New fixed assets will be purchasedduring May for $$30,000.$ The company declares dividends of $$16,000$ eachquarter, payable in the first month of the following quarter.Page $1$Le$,$ Le Co$.\text{'}$s Balance Sheet at March $31$ is as follows.ASSETSCash $$16,000$Accounts receivable$*4,037,000$Inventory $(100800$ units$)**2,784,600$Unexpired insurance $19,200$Fixed assets $($net of depreciation$)193,600$Total Assets $$7,050,400$LIABILITIES AND EQUITYAccounts payable $($purchases$)$ $$1,515,800$Dividends payable $16,000$Capital stock, $($no par$)400,000$Retained Earnings $5,118,600$Total Liabilities & Equity $$7,050,400*$Accounts receivable consists of $$902,000$ from February salesand $$3,135,000$ from March Sales. Use these numbers for both scenarios.$**$ Use this same March ending inventory number for both scenarios.The company has a good relationship with its bank and can borrow moneyat a $10\%$ annual rate at any time and in any amount. All borrowingand repayments must be made at the end of the month. When the companyis ready to make a payment, all unpaid interest must be paid first. After theunpaid interest is paid, then principal can be repaid as long as the minimumcash balance is maintained.Page $2$Le$,$ Le Co$.$ Required:You will complete all tasks listed below for the original facts above...thiswill be Scenario $1.$ Then you will repeat the entire process for Scenario $2.$This second scenario will show what would happen if there was an increase of$20\%($twenty percent$)$ in the number of units sold. This is essentially a flexible budget.SCENARIO $1$ Prepare a Master Budget for the three month period ending June $30$th$.$ Includethe following detailed budgets:$1.$ a$.$ A sales budget by month and in total.b$.$ A schedule of budgeted cash collections from sales and accountsreceivable by month and in total.c$.$ A purchases budget in units and dollars by month and in total.d$.$ A schedule of budgeted cash payments for purchasesby month and in total$\mathrm{.}2.$ A cash budget by month and in total$\mathrm{.}3.$ A budgeted income statement for the three$-$month period endingJune $30.$ Use the contribution margin approach$\mathrm{.}4.$ A budgeted balance sheet as of June $30\mathrm{.}5.$ Calculate the Contribution Margin and Break$-$Even amounts $($for the three month period$)$based on your assumptions about variable and fixed costs.SCENARIO $2$ Repeat all the steps $(1-5)$ shown above assuming that the number of unitsexpected to be sold increase by $20\%.$ The months January to March havealready occurred so those will be the same for both Scenarios.Please pay attention to the information above when it says:$*$Accounts receivable consists of $$902,000$ from February salesand $$3,135,000$ from March Sales. Use these numbers for both scenarios.$**$ Use this same March ending inventory number for both scenarios.Budgeted Ending Inventory for June is based on July sales. Thereforeyou will need to increase the expected July sales in Scenario $2$ andthis will mean June Ending Inventory will be different in Scenario $2.$ Here are some check figures to check your final work. If you agree with these check numbers it is an important confirmation, although it is not guarantee that everything is correct. Amounts for the quarter: Scenario $1$ Scenario $2$ Sales budget $$20,944,000$ $$25,132,800$ Budgeted cash collections $$16,566,000$ $$19,071,800$ Budgeted purchases $$12,773,800$ $$15,885,480$ Budgeted cash payments$-$purchases $$12,433,200$ $$15,173,600$ Ending Cash Balance $$2,045,200$ $$1,423,719$ Inc Stmt Interest Expense $$0$ $$6,081$ Inc Stmt Net income $$6,499,600$ $$7,826,319$ Bal Sheet AR $$8,415,000$ $$10,098,000$ Bal Sheet Inventory $$3,182,400$ $$3,818,880$ Bal Sheet AP Bal Sheet Retained Earnings $($RE$)511\mathrm{.}602200$ $$2,227,680$ $$12,928,919$ Bal Sheet Total Assets $(=$Liab$+0$E$)$ $$13,874,600$ $$15,572,599$