The sales budget for Roh Ltd for the six months to 30 November 2003 is as follows.

Further information is as follows: 

1. All units are sold for $60. Customers are allowed 1 month's credit. 

2. Monthly production of the units is equal to the following month's sales plus 10% for stock. 

3. Costs per unit are as follows:

4. Materials are purchased one month before they are needed for production and are paid for two months after purchase. 

5. Wages and variable overheads are paid in the current month. 

6. Fixed overheads are paid in the following month. 

7. The following information is to be taken into account: 

(i) Cash book balance at 30 June 2003: $16 000; 

(ii) Stock of finished goods at 31 July 2003: $56 420.

Required 

(a) The following budgets for the month of August 2003 only. 

(i) Production budget (in units only) 

(ii) Purchases budget 

(iii) Sales budget 

(b) Calculate the cash book balance at 31 July 2003. 

(c) A cash budget for the month of August 2003 only. 

(d) 

(i) Explain the advantages and uses of budgets. 

(ii) Explain how principal budget factors affect the preparation of budgets.

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Units 600 800 1000 900 980 eru 1020 to bring June July August September October November