Tracey Company has projected sales and production in units for the second quarter of the coming year as follows:

April May June

Sales........... 55,000 45,000 65,000

Production.... 65,000 55,000 55,000

Cash-related production costs are budgeted at $7 per unit produced. Production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $110,000 per month. The accounts payable balance on March 31 totals $193,000, which will be paid in April.

All units are sold on account for $16 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. April 1, Accounts receivable on totaled $520,000 ($100,000 from February's sales and the remainder from March).

Required:

a. Prepare a schedule for each month showing budgeted cash disbursements for Tracey Company. (24 marks)

b. Prepare a schedule for each month showing Tracey Companys budgeted cash receipts. (18 marks)

c. How to overcome low inventory turnover, explain and give 2 examples? (Word limit:200 words) (8 marks)