ALERT Boxes is a manufacturing firm that produces boxes and wholesales them to distributors. All the boxes are produced and sold in the same month. The selling price of each unit of boxes is at RM10. The sales data of the shoes are provided below:

Month	Sales (Units)
November	10,000
December	15,000
January	12,000
February	10,000
March	9,000
April	10,000

 

To encourage customers to make an earlier payment, ALERT Boxes offers a 3% cash discount if they made their payment in the month of purchase. Based on the company's statistics, half of customers will take up this offer. 75% of the other half of the customers will pay up in the following month and 23% the month after. The remaining 2% is estimated to be uncollectible. 

 

ALERT Boxes also purchased new manufacturing equipment in December on a credit of RM60,000. Payment will be spread over the next 3 months starting from January. Monthly wages of RM20,000 are paid each month to the employees of the company.

 

The monthly fixed cost stands at RM15,000 each month inclusive of RM500 depreciation expense. Other variable cost is at RM2 per unit sold. Fixed cost and variable cost are paid in the month without credit.

 

Producing one unit of shoes would require one unit of raw material. The company's policy on raw materials for the shoes is to have an ending inventory of 20% of the following month's sales. The cost of the direct material of is RM3 per unit. ALERT Boxes have an agreement with their raw material supplier to pay for the raw material supplied each month in the following month. The company has a beginning inventory of 2,000 units of raw materials in the month of November.

 

The opening cash balance of ALERT Boxes in January is RM24,050.

 

 Required:

a) Prepare schedule of monthly payment of raw materials, for each month from January to March.

b) Prepare schedule of monthly cash receipts from sales, for each month from January to March.

c) Prepare ALERT Boxes monthly cash budget for each month from January to March.