Transcribed image text : Portland Co. manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo, which costs $2.00 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $12.00 per hour. Portland has the following inventory policies: - Ending finished goods inventory should be 40 percent of next month's sales. - Ending direct materials inventory should be 30 percent of next month's production. Expected unit sales (frames) for the upcoming months follow: Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be $7 , 200 ( $600 per month) for expected production of 4,000 units for the year. Selling and administrative expenses are estimated at $650 per month plus $0.60 per unit sold. Instructions: 1. Prepare the following for Portland, Inc., for the second quarter (April, May, and June). Include each month as well as the quarter 2 total for each budget. a. Sales budget. 2. Production budget. b. Direct materials purchases budget. c. Direct labor budget. d. Manufacturing overhead budget e. Budgeted cost of goods sold. f. Selling and administrative expenses budget. 2. The company had $10 , 800 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the credit sales, 50 percent is collected during the month of the sale, and 50 percent is collected during the month following the sale. Of direct materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month. Direct materials purchases for March 1 totaled $2 , 000 . All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $150 in depreciation. During April, Portland plans to pay $3 , 000 for a piece of equipment. Prepare the following for Portland for quarter 2: a. Budgeted cash receipts. Include each month (April to June) as well as quarter 2 totals. b. Budgeted cash payments. c. Cash budget. Assume the company can borrow in increments of $1 , 000 to maintain a $10 , 000 minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter