Consider the following information from a company's actual sales for the months of July, August and September:

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Question:

Consider the following information from a company's actual sales for the months of July, August and September:
Month Price (USD) Units
July 2,500 + VAT 70,000
August 2,600 + VAT 80,000
Sept. 2,800 + VAT 90,000
Projected sales for October: 95,000 units at $2,900 + VAT each

Based on the company's historical background and current credit policies, it is estimated that 10% of sales will be cash, 60% 30 days simple and 30% 60 days simple (assuming 0% delinquency and uncollectibility).

The unit cost of the raw material is $850 + VAT for the months of July, August and September, and $870 + VAT for the months of October, November and December. Raw material is purchased and processed the month prior to the sale of finished products (according to the production cycle and quality control).

The supplier credit provides for a simple 90-day term.
The production labor cost will total $40,000,000 per month during the months of October, November and December.
Depreciation is estimated at $8,000,000 per month and other CIF at $4,000,000 per month.
The company will be required to pay the following taxes during the month of October:
P.P.M. 1.9% of net sales previous month.
V.A.T. $ 12,000,000
The administrative and selling expenses are detailed as follows:
Salaries: Ps. 8,000,000 per month.
Commissions: 9.0% of net sales for the same month.
Supplies and miscellaneous services: $1,780,634 + VAT per month (paid on credit).

Additional Information
a) On October 20, the Company plans to purchase a machine for $2,000,000 + VAT (on simple credit, 60 days term).
b) For a documented credit contracted 8 years ago, the company still has three bills to pay:
Bill 1 $ 5,200,000 due on November 4.
Bill 2 $ 3,300,000 with maturity on December 25.
Bill 3 $ 4,000,000 maturing on January 30 of the following year.
c) On December 28, long-term bank loan installments totaling $11,500,000 (including interest of $1,240,125) are due.
d) The initial cash balance amounts to $5,900,000.
e) Estimated price-level restatement for January $0

f) VAT Rate : 19%

Prepare the cash budget for the month of OCTOBER.