Corner Brook Furniture Co. makes book stands and expects sales and collections for the first three months of 2020 to be as follows:

January February March Total

Sales quantity (units) 9,600 7,800 11,100 28500

Revenue Rs. 128,000 Rs. 104,000 Rs. 148,000 Rs. 380,000

Collections Rs. 116,200 Rs. 81,300 Rs. 101,500 Rs. 299,000

The December 31,2019 balance sheet revealed the following selected account balances

Cash Rs. 18,230

Direct material Inventory Rs. 8,230

Finished goods inventory Rs. 23,200

Accounts payable Rs. 5,800

Finished goods inventory 1,920 book stands

The direct material inventory balance represents 1,580 pounds of scrap iron and 1,200 book stands bases. Each book stands requires 2 pounds of scrap iron, which costs Rs. 3 per pound. Book stand bases are purchased from a local lumber mill at a cost of Rs. 2.50 per unit, company management decided that, beginning in 2020, the ending balance of Direct Material Inventory should be 25 percent of the following month's production requirements and that Page 3 of 3 the ending balance of Finished Goods Inventory should be 20 percent of the next month's sales. Sales for April and May are expected to be 12,000 book stand per month. The company normally pays for 75 percent of a month's purchases of direct material in the month of purchase (on which it takes a 1 percent cash discount) the remaining 25 percent is paid in full in the month following the month of purchase. Direct labor is budgeted at Rs. 0.70 per book stand produced and is paid in the month of production. Total cash manufacturing overhead is budgeted at Rs. 14.000 per month plus Rs. 1.30 per book stand. Total cash selling and administrative costs equal Rs. 13,600 per month plus 10 percent of sales revenue. These costs are all paid in the month of incurence. In addition, the company plans to pay executive bonuses of Rs. 3,5000 in January 2020 and make an estimated quarterly tax payment of Rs. 5,000 in March 2020. Management requires a minimum cash balance of Rs. 20,000 at the end of each month. if the company borrows funds, it will do so only in Rs. 1,000 multiples at the beginning of a month at a 12 percent annual interest rate. Loans are to be repaid at the end of a month in multiples of Rs. 1.000. interest is paid only when a repayment is made. Investments are made in Rs. 1,000 multiples at the end of a month and the return on investment is 8 percent per year.

Required:

a. Prepare production budget by month and in total for the first quarter of 2020.

b. Prepare direct material purchases budget by month and in total for the first quarter of 2020.

c. Prepare schedule of cash payments for purchases by month and in total for the first quarter of 2020.

d. Prepare combined payments schedule for manufacturing overhead and selling and administrative cash costs for each month and in total for the first quarter of 2020.

e. Prepare cash budget for each month and in total for the first quarter of 2020