9. Production units (for material, labour and variable production overhead). Please take note that that in some cases, production can start before they are required for sale. Question 1 Baba Bhd is preparing its budget for the four months commencing 1 August 2006. The company makes and sells a single product. The associated costs per unit of the product are as follows: RM Selling price 80 Direct material 58 Direct labour 10 Variable overhead The following information is also available: 2006 June July August September October November Sales unit 1300 1500 1700 1900 1800 1800 Production unit 1400 1500 1800 2000 2200 2200 Additional information: 1 . Fixed overhead is budgeted at RM7,000 per month, including depreciation of RM1,000 and paid in the month in which it is incurred. 2. 75% of wages are paid during the month in which they are earned, and the balance in the following month. Variable overhead is paid in the month in which it is incurred. Material cost are paid two months after the material is used in the production. Tax of RM14,000 will be paid in September. The company will purchase a new machine for RM30,000 in August. The existing machine will be sold for RM3,000 receivable in October. 7. 5% of monthly sales are for cash. The remainder will be sold on credit and will be settled one month after the sales. No bad debts are anticipated. 8. The cash balance on 1 August 2006 is expected to be RM100, 000. Required: (i) Prepare a cash budget for the four months commencing 1 August 2006