Renfro Company is preparing its master budget for May. Renfro’ssales budget shows expected sales for May of 100,000 units. Thebeginning finished goods inventory is an estimated 12,000 units andthe desired ending inventory is 9,000 units. Materials are expectedto be purchased at $2 per pound and each unit of product requires 3pounds of material. Beginning and ending materials inventories areexpected to be 24,000 and 20,000 pounds, respectively. Direct laborfor each unit produced requires 0.5 hours at an hourly rate of $12.At $20 each, unit sales are expected to be 80,000 and 100,000 forApril and May, respectively. Total sales are typically 20% for cashand 80% on credit; 30% of credit sales are collected in the monthof sale, with the balance collected in the following month.Merchandise purchases are expected to be $118,000 and $226,000 forApril and May, respectively. Typically, 25% of total purchases arepaid for in the month of purchase with a 2% cash discount. Thebalance of purchases is paid for (without discount) in thefollowing month. Required: Compute each of the following, showingall work for partial credit. 1. Number of units to be produced. 2.Cost of direct materials to be purchased. 3. Direct labor cost forMay. 4. Expected cash receipts for May. 5. Expected cash paymentsin May for purchases.