Window Blinds Company (WBC) manufactures window blinds from wood. WBC sells the blinds to Home Depot for $40 each. Each blind uses 3 feet of high-quality teak hardwood, which costs $3 per foot. Each blind takes 45 minutes to manufacturer and WBC pays its workers $10 per hour.

WBC has the following inventory and production policies that you need to be aware of:

WBCs policy is to end the month with a finished goods inventory equal to 30% of next months budgeted sales

WBCs policy is to start each month with a beginning raw materials inventory equal to 40% of the materials needed for the months planned production.

All WBC sales are on account and it collects 70% of its cash in the month of sale, 15% in the 1^st month following the month of sale and 15% in the 2^nd month following the month of sale.

100% of the materials, labor and other costs are paid in the month incurred.

Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced and is paid in the month incurred.

WBC rents the factory at a cost of $8,400 annually and pays the rent monthly. This is considered fixed manufacturing overhead. WBC expects to produce a total of 3,500 units for the year.

Selling and administrative expenses are estimated at $800 per month plus $0.50 per unit sold.

Expected unit sales for the upcoming months follow:

February March	300 300
April	225
May	1200
June	450
July	300
August	350

Required:

Prepare the following for WBC for the second quarter of the year (April, May, June). Include each month in your projections as well as the 2^nd Quarter totals for each budget.

Sales Budget

Production Budget

Raw Materials Purchases Budget

Direct Labor Budget

Manufacturing Overhead Budget

Budgeted Cost of Cost of Goods Sold

Selling and Administrative Expenses Budget

WBCs Budgeted Income Statement for the 2^nd Quarter.

Cash Budget for the 2^nd Quarter

What will be the number of units and the value of the Raw Materials and Finished Goods Ending Inventories on the Balance Sheet at the End of the 2^nd Quarter?

What will be the balance in Accounts Receivable at the end of the 2^nd Quarter?

Will WBC need to consider borrowing any cash during the 2^nd Quarter? The beginning cash balance is $100.