2 (34 MARKS/ 62 MINTUES) HIJ Ltd was established six months ago. It only manufactures Product R. The following is its budget for the next five months. 1) Budget sales of Product R: Budgeted Budgeted Month units sold total sales RM January 18,000 90,000 February 24,000 120,000 March 22,000 110,000 April 18,000 90,000 19,000 95,000 May 2) Collection of sales proceed: All sales are expected to be carried out on credit. According to company records, its credit customers are expected to pay 70% in the month of sale and 28% in the next month. Those customers who pay in the sales month are given 2% cash discount from the invoice price. The remaining trade receivables are expected to be uncollectible. 3) Finished goods inventories: Inventories of finished goods are expected to be 5,000 units at 1 January. The business's policy is that, in the future, the inventories at the end of each month should equal 20% of the following month's planned sales requirements. 4) Raw materials inventories: Inventories of raw materials are expected to be 4,000 kg on 1 January. The business's policy is that, in the future, the inventories at the end of each month should equal 50% of the following month's planned production requirements. Each Product R requires 0.5 kg of the raw material, which costs RM3/kg. Raw materials purchases are paid in the month after purchase. 5) Labor and overheads: The direct labor cost of each Product R is RM3.80. The variable overhead element of each Product R is RM1.50. Fixed overheads, including depreciation of RM4,500, total RM20,700 a month. All labor and overheads are paid during the month in which they arise. 6) Cash balance: On January 1, the company's cash balance was RM43,000. The minimum cash balance is RM40,000. If there is a shortage, a loan is obtained at an annual interest rate of 8% on the first day of the period. The interest expense must be paid at the end of the next month. 7) Cash dividend received: In March, the company will receive a cash dividend of RM56,000 from its stock market investments. Page 3 of 6 8) Income tax: Corporate income taxes are approximately RM4,500 and will be paid in February. c) Cash budget for February and March for the 20X3