CASE 8-31 Master Budget with supporting schedules 4, a distributor of ear You have just been hired as a new management trainee by Earrings Unlimited,a past, rings to various retail outlets located in shopping malls across the country. In the done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare comprehensive b for the upcoming second quarter in order to show management the benefits that can be gained from integrated budgeting program. To this end, you have worked with accounting an other areas to gather the information assembled below. but all are sold for the same price s10 per pair The company sells styles earrings, Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings: 20,000 June (budget January (actual 26,000 July (budget February (actual) 28,000 40,000 August (budget) March (actual) 25,000 65,000 September (budget April (budget) May (budget) The concentration of before and during May is due to Mother's Day.Sumcientinventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month is Suppliers are paid $4 for a pair of earrings. One-half of a month's purchases paid for in the month of purchase; the other half paid following month. All on month's is for discount, and payable within 15 days. The company has found, however, that only 20% of a sales are collected in the month of sale. An additional 70% collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible. Monthly operating expenses for the company are given b Variable 4% of sales Sales commissions $200,000 Advertising $18,000 Rent $106,000 Salaries $7,000 Utilities $3,000 Insurance $14,000 Depreciation