Please review the case study and answer the included questions.

438 PART 4 CASH, ACcOUNTING, AND FINANCE IN THE SMALL BUSINESS Based on her experience to date, Phionia predicts the following sales in cases: Nov Dec Jan Feb Mar Apr May Jun uAug 4,300 4,600 5,000 5,500 6,100 6,800 7,000 7,200 7,400 7,500 Each case of Finicky Feline Gourmet Cat Dinner requires 5 pounds of prime lamb meat, 10 pounds of short grain Chinese rice, 2 pounds of wild caught Alaskan salmon, and 1 pound of secret vitamins and supplements. Phionia plans to maintain end-of-month inventories equal to 10 percent of the next month's projected sales, to meet expected sales growth. All the ingredients inventories are to be maintained at 5 percent of the production needs for the next month, but not to exceed 1,000 pounds of any one ingredient. January will begin with all inventories at the projected levels. Phionia has the following price quotes good for the following year: Lamb Rice Salmon Vitamins $15.00 1.20 24.00 5.00 The production process requires direct labor at two skill levels: (1) ingredient preparation, $18 per hour, and (2) cooking and canning, $24 per hour. Two workers are willing to work part days if there is not enough demand for them to work full time It takes one hour to process one batch. Because of preparation and cleanup time, only six batches can be produced per day Each batch produces enough food to fill 100 cases. Manufactur- ing overhead is $6,000 fixed per month plus $15 per case CASE DISCUSSION QUESTIONS 1. Prepare the following budgets for the period, January through June a. Sales budget in dollars. b. Production budget in units c. Direct materials purchases budget in pounds. d. Direct materials purchases budget in dollars. e. Direct manufacturing labor budget in dollars Comment on the viability of this business and the advisability of the investor making a $50,000 investment to get it started 2