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Question 1 Herbert Bhd makes a single product; whose unit budget details are as follows: RM RM Selling price 30 Less Costs: Direct material 9 Direct labor 4 Direct production expenses 6 Variable selling expenses 4 23 Contribution. 7

Additional information: a. Unit sales are expected to be: June July August September October 1,000 800 400 600 900

b. Credit sales will account for 60% of total sales. Debtors are expected to pay in the month following sale for which there will be a cash discount of 2%.

c. Stock levels will be arranged so that the production in one month will meet the next months sales demand.

d. The purchases of direct materials in one month will just meet the next months production requirements.

e. Suppliers of direct materials will be paid in the month following purchase. f. Labor costs will be paid in the month in which they are incurred. All other expenses will be paid in the month following that in which they incurred.

g. Fixed expenses are RM2,000 per month and include RM180 for depreciation. h. The bank balance at 1 July 2021 is RM3,900 favorable to the business.

Required: Cash budget for three months period ending on 30th September 2021.