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 belleves that it will need to borrow cash to continue operations. It opened, negotiations with the local bank for a one$-$month loan of $$68,000$ 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 avallable:

The company budgeted sales at $26,000$ units per month in February, April, and May and at $23,000$ units in March. The selling price is $$74$ per unit.

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

The inventory of finished goods on February $1$ was $3,800$ 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 $2,980$ 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 $320$ pounds per shipment.

Selling expenses are $6$ percent of gross sales. Administrative expenses, which include depreciation of $$1,450$ per month on office furniture and fixtures, total $$76,800$ per month.

The manufacturing budget for the utensil, based on normal production of $25,000$ units per month, follows.

$\backslash$table$[[$Materials $(\%$ pound per utensil, $12,500$ pounds, $$30$ per pound$),$$$375,000$