Taylor Pty Ltd is based in Brisbane and sells ’glamping’ yurt tents imported from China at a cost of $150 each plus import duties and other costs of $60. These purchase and import costs are paid cash in the month that they incur and are not expected to change in the next six months. Taylor Pty Ltd sold 1500 yurts per month from July to September, but intends spending $1500 per month on advertising from October to December inclusive in the lead-up to the Australian summer.

As a result, the company expects that sales will increase to 3000 yurts in October and then by 200 units per month until May the following year when they are expected to decrease to 2000 yurts. Currently yurts sell for $480 but the price will be increased in the lead-up to Christmas with the selling price increasing to $500 in November and December and then reverting to $480 in January. Yurts are packaged and sent to customers by courier at a cost of $30 each (for which the customers pay in addition to the price of the tent, so it is added to their invoice). Taylor Pty Ltd has an account with the courier company and pays the delivery costs the month following delivery. Other fixed costs are expected to be $3000 per month for the next six months, paid in the month of expenditure. Sales are 60 per cent cash and 40 per cent credit. Credit sales customers pay 80 per cent in the month following sale and 20 per cent in the month after that. To prevent loss of sales due to stock outs, Taylor Pty Ltd has a target ending inventory level of 20 per cent of the next month’s sales in units. Taylor Pty Ltd’s bank balance at 1 October is $100 000.

Required:

Prepare the following budgets for the October–December quarter (each month and quarter total):

a sales budget and a schedule of cash collections b purchases budget c cash budget.