110 CHAPTER THREE Financial September 2011: Section A. Question 2 MIS Trading forecasts unit sales for the next few months are as follows: Month Unit Sales 1,000 January 2011 February 1,300 March 1,600 April 1,700 May 1,900 June 1,100 July 900 August 900 a) Selling price per unit is RM200. 40percent of each month's sales are in cash and the remaining balance are on credit. The cash sales and 20percent of credit sales are collected in the month of sales, 65percent in the month following sales, and 15percent in the second month following sales. b) Cash dividend of RM6,000 will be received in June. c) Raw materials cost equal 40percent of sales, and they are purchased on credit one month in advance of sales. 30percent of purchases are paid in the month of purchase and the remaining 70percent are paid in the following month. d) Direct wages cost are RM5 per unit and are paid in the month incurred. e) Quarterly tax payments of RM8,000 each are due in March and June. f) Fixed monthly expenses: a. Rent is RM20,000 b. Selling expenses are RM2,000 plus RM1.50 per unit sold. Depreciation is RM12,000 C. g) The company has an ending cash balance of RM22.000 in March and wishes to maintain a monthly minimum cash balance of RM10,000. Prepare a cash budget for MIS Trading for the second quarter of 2012. (20 marks)