The Marketing department of Smith Corporation Inc. has submitted the following budgeted production units for the upcoming fiscal year;

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Budgeted Sale Units	19,000	22,000	25,000	21,000

The selling price of the companys product is $ 12.00 per unit (All sales are done on credit). Management expects to collect 75% of sales in the quarter in which the sales are made and 25% in the following quarter. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $ 83,000.

The company expects to start the first quarter with 2,500 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarters budgeted sales. The desired ending finished goods inventory for the fourth quarter is 2,800 units.

Each unit requires 0.80 direct labor-hours and direct labor-hour workers are paid $ 18 per hour.

Requirement

1. A sales budget, including a schedule of expected cash collections.
2. A production budget.