Problem $13-66($Algo$)$ Comprehensive Budget Plan $($LO $13-3,4,5)$

Lane Products manufactures a popular kitchen utensil. The company recently expanded, and the controller believes that it will need to borrow cash to continue operations. It opened negotiations with the local bank for a one$-$month loan of $$80,000$ starting March $1.$ The bank would charge interest at the rate of $0\mathrm{.}5$ percent per month and require the company to repay interest and principal on March $31.$ In considering the loan, the bank requested a projected income statement and cash budget for March.

The following information is available:

The company budgeted sales at $32,000$ units per month in February, April, and May and at $29,000$ units in March. The selling price is $$80$ per unit.

The company offers a $2$ percent discount for cash sales. The company's experience is that bad debts average $1$ percent of credit sales.

The inventory of finished goods on February $1$ was $4,400$ units. The desired finished goods inventory at the end of each month equals $25$ percent of sales anticipated for the following month. There is no work in process.

The inventory of raw materials on February $1$ was $3,280$ pounds. At the end of each month, the raw materials inventory equals no less than $20$ percent of production requirements for the following month. The company purchases materials in quantities of $350$ pounds per shipment.

Selling expenses are $6$ percent of gross sales. Administrative expenses, which include depreciation of $$1,750$ per month on office furniture and fixtures, total $$80,400$ per month.

The manufacturing budget for the utensil, based on normal production of $31,000$ units per month, follows.

$\backslash$table$[[$Materials $(\frac{1}{2}$ pound per utensil, $15,500$ pounds, $$30$ per pound$),$$$465,000$

b$.$ Prepare a projected income statement for March. Cost of goods sold should equal the variable manufacturing cost per unit times the number of units sold plus the total fixed manufacturing cost budgeted for the period. Assume that $40$ percent of sales are cash sales.

Complete this question by entering your answers in the tabs below.

Required $A1$

Required A$2$

Required $B$

Prepare a projected income statement for March. Cost of goods sold should equal the variable manufacturing cost per unit times the number of units sold plus the total fixed manufacturing cost budgeted for the period. Assume that $40$ percent of sales are cash sales.

Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar.

Show less $A$

$\backslash$table$[[$Lane Products$],[$Projected Income Statement$],[$For the Month of March$],[$Sales revenue,,$$,2,320,000$