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Karmee Company has been accumulating operating data in order to prepare an annual profit plan. Details regarding Karmee's sales for the first 6 months of the coming year are as follows: Estimated Monthly Sales January $685,000 February 723,000 March 815,000 April 665,000 May 717,000 June 825,000 Karmee's cost of goods sold Type of Monthly Sale Cash sales 15% 85% Credit sales Collection Pattern for Credit Sales Month of sale 25% One month following sale 45% Second month following sale 30% averages 45% of the sales value. Karmee's objective is to maintain a target inventory equal to 35% of the next month's sales in units. Purchases of merchandise for resale are paid for in the month following the sale. The variable operating expenses (other than cost of goods sold) for Karmee are 15% of sales and are paid for in the month following the sale. The annual fixed operating expenses are presented below. All of these are incurred uniformly throughout the year and paid monthly except for insurance and property taxes. Insurance is paid quarterly in January, April, July, and October. Property taxes are paid twice a year in April and October Annual Fixed Operating Costs Advertising Depreciation Insurance $ 648,000 480,000 160,000 Property taxes Salaries 320,000 1,074,000 The total cash disbursements that Karmee Company will make for the operating expenses (expenses other than the cost of goods sold) during the month of April will be

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