Business started off great the first year that the Golden Wolves Statues started production. Corey realized, however, that the business was seasonal and had peak sales in the fall, during the third quarter, when the students started college and continued through the beginning of the football season. The following information concerns operations for Year 2, the coming year, and for the first two quarters of Year 3. A. Golden Wolves Statue Company is now making only the forward-facing statue with the Alvernia University t-shirt and sells the product for $150/unit. Budgeted unit sales for the next six quarters are as follows (all sales are on credit). Year 2 Quarter Year 3 Quarter 2 2 3. 550 680 Budgeted unit sales 009 0000 B. Sales are collected in the following pattern: 75% in the quarter the sales are made, and the remaining 25% in the following quarter. On January 1, Year 2, the company's balance sheet shows $6,500 in accounts receivable, all of which will be collected in the first quarter of the year. Bad debts are negligible and can be ignored. C. The company desires an ending finished goods inventory at the end of each quarter equal to 30% of budgeted unit sales for the next quarter. On December 31, Year 1, the company had 400 units on hand. D. As you know from the cost table, 2 pounds of resin, 1 t-shirt, and a box are required to complete one unit of the product. As stated above, the company has sufficient t-shirts and boxes to last through Year 3 due to a gift. The company requires ending raw materials inventory at the end of each quarter equal to 10% of the following quarter's production needs. On December 31, Year 1, the company had 230 pounds of resin on hand. E. The price of the resin and the t-shirts stayed the same as presented in the cost table - $4.00 per pound of resin (2 lbs per statue), $0.75 per t-shirt and $0.40 per box. Raw material purchases are paid for in the following pattern: 60% paid in the quarter the purchases are made, and the remaining 40% paid in the following quarter. Golden Wolves Statues was given a gift of enough t-shirts and boxes at the end of Year 1 to last through Year 3. On January 1, Year 2, the company's balance sheet showed $366 in accounts payable for the total of resin raw material, all of which will be paid for in the first quarter of the year.