Draw up a cash budget for N. Morris showing the balance at the end of each month,

Question:

Draw up a cash budget for N. Morris showing the balance at the end of each month, from the following information for the six months ended 31 December 19X2:

(a) Opening cash (including bank) balance \(£ 1,200\)

(b) Production in units: image text in transcribed

(c) Raw materials used in production cost \(£ 5\) per unit. Of this 80 per cent is paid in the month of production and 20 per cent in the month after production.

(d) Direct labour costs of \(£ 8\) per unit are payable in the month of production.

(e) Variable expenses are \(£ 2\) per unit, payable one-half in the same month as production and one-half in the month following production.

(f) Sales at \(£ 20\) per unit:
\(19 \times 2\)
Mar Apr May Jun Jul Aug Sep Oct Nov Dec \begin{tabular}{llllllllll}
260 & 200 & 320 & 290 & 400 & 300 & 350 & 400 & 390 & 400 \end{tabular}
Debtors to pay their accounts three months after that in which sales are made.
(g) Fixed expenses of \(£ 400\) per month payable each month.

(b) Machinery costing \(£ 2,000\) to be paid for in October \(19 \times 2\).
(i) Will receive a legacy \(£ 2,500\) in December \(19 \mathrm{X} 2\).
(j) Drawings to be \(£ 300\) per month.