(A3,2) Pet Transport Company makes two pet carriers, the Cat allac and the Dog eriffic They are both made of plastic with metal doors, but the Cat allac is smaller The assumptions and the budget information for the two products for the month of April is given in the following tables Pet Transport (PT) does not make any sales on credit PT sells only to the public and accepts cash and credit cards 90 of its sales are to customers using credit cards, for which PT gets the cash right away, less a 4 transaction fee Purchases of materials are on account PT pays for half the purchases in the period of the purchase and the other half in the following period At the end of March, PT owes suppliers $8,800 During April they plan to purchase direct materials worth $12,085 PTplans to replace a machine in April at a net cash cost of $13,200 Labour, other manufacturing costs, and nonmanufacturing costs are paid in cash in the month incurred except of course depreciation, which is not a cash flow Depreciation is $22,500 of the manufacturing cost and $10,000of the nonmanufacturing (fixed) cost for April PTcurrently has a $2,700 loan at an annual interest rate of 12 The interest is paid at the end of each month If PT has more than $7,000 cash at the end of April it ill pay back the loan PT owes $5,800 in income taxes that need to be remitted in April PT has cash of $5,500 on hand at the end of March Required 1 Prepare a cash budget for April for Pet Transport 2 Why do Pet Transport's managers prepare a cash budget in addition to the revenue, expenses, and operating income budget Budget information Revenue Budget For the Month of April Units Selling price Total Revenues 500 $ 215 $ 107,500 68,800 320 $ 176,300 Manufacturing Overhead Budget For the Month of April Machine setup costs $ 8,900 Processing costs 43,000 Cat allac 215 Dog eriffic 448 Inspection costs $ 52,348 Total Total Direct Manufacturing Labour Costs Budget For the Month of April Nonmanufacturing Costs Budget Output units DMLH per Total Hourly For the Month of April produced unit Hours Wage Rate Total Salaries 18,500 520 3 1,560 $ 10 $ 15,600 Other fixed costs 20,000 200 5 1,000 10 10,000 Sales commissions 1,763 $ 25,600 40,263 Total nonmanufacturing costs Cat allac Dog eriffic Total S

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(A3,2) Pet Transport Company makes two pet carriers, the Cat-allac and the Dog-eriffic. They are both made of plastic with metal doors, but the Cat-allac

(A3,2) Pet Transport Company makes two pet carriers, the Cat-allac and the Dog-eriffic. They are both made of plastic with metal doors, but the Cat-allac is smaller. The assumptions and the budget information for the two products for the month of April is given in the following tables:

	Pet Transport (PT) does not make any sales on credit. PT sells only to the public and accepts cash and credit cards; 90% of its sales are to customers using credit cards, for which PT gets the cash right away, less a 4% transaction fee.
	Purchases of materials are on account. PT pays for half the purchases in the period of the purchase and the other half in the following period. At the end of March, PT owes suppliers $8,800. During April they plan to purchase direct materials worth $12,085.
	PTplans to replace a machine in April at a net cash cost of $13,200.
	Labour, other manufacturing costs, and nonmanufacturing costs are paid in cash in the month incurred except of course depreciation, which is not a cash flow. Depreciation is $22,500 of the manufacturing cost and $10,000of the nonmanufacturing (fixed) cost for April.
	PTcurrently has a $2,700 loan at an annual interest rate of 12%. The interest is paid at the end of each month. If PT has more than $7,000 cash at the end of April it ill pay back the loan. PT owes $5,800 in income taxes that need to be remitted in April. PT has cash of $5,500 on hand at the end of March.

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Required

1.	Prepare a cash budget for April for Pet Transport.
2.	Why do Pet Transport's managers prepare a cash budget in addition to the revenue, expenses, and operating income budget?

Budget information Revenue Budget For the Month of April Units Selling price Total Revenues 500 $ 215 $ 107,500 68,800 320 $ 176,300 Manufacturing Overhead Budget For the Month of April Machine setup costs $ 8,900 Processing costs 43,000 Cat-allac 215 Dog-eriffic 448 Inspection costs $ 52,348 Total Total Direct Manufacturing Labour Costs Budget For the Month of April Nonmanufacturing Costs Budget Output units DMLH per Total Hourly For the Month of April produced unit Hours Wage Rate Total Salaries 18,500 520 3 1,560 $ 10 $ 15,600 Other fixed costs 20,000 200 5 1,000 10 10,000 Sales commissions 1,763 $ 25,600 40,263 Total nonmanufacturing costs Cat-allac Dog-eriffic Total S