20 Marks) QUESTION 2 REQUIRED Use the information given below to prepare the Cosh Budget for a project of Sanhall Limited for March April and May 2021 (Provide separate monetary columns for each month) INFORMATION The following forecasts have been made by Sanhall Limited in respect of Project Z for February to May 2021 1 The sales manager anticipates the following sales volumes at a price of R250 per unit from the product produced from Project 2 February March May 3 500 units 2 600 units 3400 units 4 100 units April 2 Forty (40%) percent of the sales are for cash and the rest is on credit. Twenty percent (20%) of the cash sales are subject to a 10% discount. Debtors pay their accounts in the month after the sale. The unit costs of production include the following Direct materials R70 per unit Direct labour R60 per unit 3. The purchases manager expects to purchase direct materials to manufacture the following quantities of the product each month: March Apri May 4 100 units 3 100 units 3 900 units 4 600 units February 4 Shty (60%) percent of the materials are purchased for cash and the balance is purchased on credit. Creditors are paid in the month after the purchase 5 Direct labour costs are incurred in line with the number of units produced and are paid for in the month in which they were incurred. 6. Variable overheads are estimated at R30 per unit Fixed overheads are budgeted at R90 000 per month, excluding R10 000 for depreciation Overheads are payable in the month in which they are incurred 7 The directors intend to purchase additional machinery with a cost price of R180 000 on 31 March 2021 on credit A deposit of 20% is payable on 31 March 2021 and the balance of the debt will be paid in six equal monthly instalments commencing April 2021 8 Ten percent (10%) of the total sales (before any discounts) for May 2021 will be transferred into a fixed deposit account on the last day of that month 9 Leasing costs R72 000 per annum and is payable monthly 10. A favourable bank balance of R30 000 is expected on 28 February 2021