Managerial Accounting – Second Midterm Revision Exercises – Chapter 8: ProfitPlanningQ1)[Schedule of Expected Cash Collections]ABC Co. makes a product that is verypopular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown inthe company's sales budget for the second quarter given below:AprilMayJuneTotalBudgeted Sales (all on account)$300,000$500,000$200,000$1,000,000From past experience, the company has learned that 20% of a month's sales are collectedin the month of sale, another 70% are collected in the month following sale, and theremaining 10% are collected in the second month following sale. Bad debts are negligibleand can be ignored. February sales totaled $230,000, and March sales totaled $260,000.Required:1.Prepare a schedule of expected cash collections from sales, by month and in total,for the second quarter.2.Assume that the company will prepare a budgeted balance sheet as of June 30.Compute the accounts receivable as of that date.Q2)[Production Budget]ABC Co. has budgeted sales of its popular boomerang for thenext four months as follows:Sales in UnitsApril50,000May75,000June90,000July80,000The company is now in the process of preparing a production budget for the secondquarter. Past experience has shown that end-of-month inventory levels must equal 10% ofthe following month's sales. The inventory at the end of March was 5,000 units.Required:Prepare a production budget for the second quarter; in your budget, show the number ofunits to be produced each month and for the quarter in total.