REQUIRED

Use the information given below to prepare the Cash Budget for each of the first three months of

operations $($i$.$e$.$ January, February, Marth $2024).$ Use separate monetary columns for each month.

INFORMATION

The following information relates to Baby Manufacturers which will commence business on $01$

January $2024$ with R$750000$ cash:

New machinery and equipment will be purchased on $02$ January $2024$ for R$300000.$ A deposit

of $20\%$ will be paid immediately. The balance of the debt as well as finance charges of R$18000$

will be paid in $12$ equal instalments commencing February $2024.$

Production will commence on $05$ January $2024$ and $30\%$ of the sales for February's will be

manufactured in January. Each month thereafter the production will consist of $70\%$ of the

current month's sales and $30\%$ of the following month's sales.

Estimated sales at $R72$ per unit are as follows:

Cash sales are expected to comprise $60\%$ of the total sales. A cash discount of $10\%$ will be

granted to these customers. The balance of the sales will be on credit. Thirty percent $(30\%)$ of

the amount owing is expected to be received in the month of the sale and the balance in the

month after the sale.

Variable manufacturing costs per unit are estimated as follows:

Direct materials will be purchased to meet the production requirements of each month. Sixty

percent $(60\%)$ of the purchases is expected to be for cash and the balance on credit. Creditors

are expected to be paid in the month after the purchase.

Direct labour costs are settled monthly.

Variable manufacturing overheads will be paid in the month in which they are incurred.

Fixed costs, excluding depreciation of $R5000$ per month, are expected to amount to $R40000$

per month and the fixed costs are paid monthly.