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Here is the data for Breakers, Inc. for year 2019 1. SALES BUDGET Breakers, Inc. is preparing budgets for the quarter ending June 30. Budgeted sales for the next five months are: -April 21,000 units -May 51,000 units - June 31,000 units -July 26,000 units -August 17,000 units The selling price is $12 per unit. 2. PRODUCTION BUDGET The management of Breakers, Inc. wants ending inventory to be equal to 21% of the following month's budgeted sales in units. On March 31, 5,000 units were on hand. 3. DIRECT MATERIAL BUDGET At Breakers, six pounds of material are required per unit of product. Management wants materials on hand at the end of each month equal to 11% of the following month's production. On March 31, 12,000 pounds of material are on hand. Material cost $.50 per pound. 6. SELLING AND ADMINISTRATIVE EXPENSE BUDGET -At Breakers, variable selling and administrative expenses are $0.60 per unit sold. -Fixed -selling and administrative expenses are $75,000 per month. -The $75,000 fixed expenses include $11,000 in depreciation expense that does not require a cash outflows for the month. 7. CASH RECEIPT BUDGET At Breakers, all sales are on account. The company's collection pattern is: -70% collected in the month of sale, -25% collected in the month following sale, -5% is uncollected. -The March 31 accounts receivable balance of $29,000 will be collected in full. 8. CASH DISBURSEMENT BUDGET -Breakers pays $0.50 per pound for its materials. -One-half of a month's purchases are paid for in the month of purchase; the other half is -paid in the following month. -No discounts are available. -The March 31 accounts payable balance is $11,000. 9. CASH ASSUMPTIONS: - Maintains a 11% open line of credit for $65,000. -Maintains a minimum cash balance of $35,000. -Borrows and repays loans on the last day of the month. -Pays a cash dividend of $15,000 in April. -Purchases $142,700 of equipment in May and $49,300 in June paid in cash. -Has an April 1 cash balance of $39,000

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