Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process. Waterways likes to keep 10% of the next month's unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31,2019 , totaled $183,600, Dincst Materials Divect materials cost \&o cents per pound. Two pounds ef direct materials are required to produce eachunit. Waterwans likes to kep 5 S of the materials needed for the next month in its ending irventory. Raw Materials on December 31.2019. totaled 12370 pounds. Pownent for ruterials is made within 15d3y s. 505 is paid in the month of purchase, and 50 sils paid in the movith after purchase; Accouints Payable on December 31. 2019, totaled $103.725. Direct Labor Labor requires 12 minutes per unit for completion and is paid at a rate of $9 por hour.: Variable selling and admuinistrative cost per unit is $1.50. Other information The Cash balance on December 31,2019, totaled $102,000, but management has decided it would like to maintain a cash balarice of at least $800,000 beginning on january 31,2020. Dividends are paid each month at the rate of $2.30 per share for 4,750 shares outstanding. The compary has an open line of credit with Romney's Bank. The terms of the agreement requires borrowing to be in $1.000 increments at 9% interest. Waterways borrows on the first day of the month and repays on the fast day of the month. A $450,000 equipment purchase is planned for February