Cash Budget Question Alberta Ltd's estimated revenues for the first four months of 2010 is as follinws: All sales are on credit. Customers are expected to pay one-quarter of their debts a month after the sale and the remainder after two months: sales expected for November 2009 are R95,500, and for December 2009, R105,300. Material purchases for the same period are: - One fifth of the materials are paid for in the month of purchase and the remainder two months later: deliveries received in November 2009 wereR18,800, and in December 2009, R19,600. - Old factory equipment is to be sold in February 2010 for R2,800. Receipt of the money is expected in April 2010. New equipment will be installed at a cost of R20,000. One quarter of the amount is payable in February 2010 and the remainder 2 months later. Wage costs during this period are as follows: - Three-quarters of the wages are payable in the months they fall due, the remainder a month later: wages for December 2009 are estimated atR4,200. Overhead costs are as follows: - R12,000 of total monthly overheads are payable in the month they occur, and the remainder one month later: total overheads for December2009 are expected to be R69,400. - The opening bank balance at 1 February 2010 is expected to be an overdraft of R11,000. (a) Construct a monthly cash budget for Alberta Ltd for the 3 months from 1st Feb to 30th April 2010, showing the cash balance at the end of each month. (A total column is not necessary (35 marks) (b) Advise the company about possible ways in which it can improve its cash management both in the long-term and the short-term (15 marks) Question 2 Denvon (Pty) Ltd is a small manufacturing company in Cape Town that manufactures desks. In the past, the financial director has noticed the following relationship between total overheads incurred and production levels: At the start of the current year, in accordance with the above relationship, the financial director budgeted to manufacture 6625 desks (which represents normal capacity). However, at the end of the year financial director noticed that the actual overhead expenditure was R250 000 and the total desks manufactured were actually 7250 . REQUIRED: Calculate the following: 1. The budgeted overhead cost for the current year (3 marks) 2. The under/over recovery on overheads for the current year