Duration: 6 Hours Maximum Marks: (5 * 5 = 25) 1. Donnegal Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the master budget for the first 2 quarters of 2010. All that remains in this process is the cash budget. The following information has been collected from other portions of the master budget and elsewhere. Beginning cash balance S 30,000 Required minimum cash balance 25,000 Payment of income taxes (2nd quarter) 4,000 Professional salaries: Ist quarter 140,000 2nd quarter 140,000 Interest from investments (2nd quarter) 5,000 Overhead costs: 1st quarter 75,000 2nd quarter 100,000Selling and administrative costs, including $3,000 depreciation: 1st quarter 50,000 2nd quarter 70,000 Purchase of equipment (2nd quarter) 50,000 Sale of equipment (Ist quarter) 15.000 Collections from clients: 1st quarter 230,000 2nd quarter 380,000 Interest payments (2nd quarter) Instructions Prepare a cash budget for each of the first two quarters of 2010. 2. In the month of June, Barbara's Beauty Salon gave 2,700 haircuts, shampoos, and permanents at an average price of $30. During the month, fixed costs were $18,000 and variable costs were 70% of sales. Instructions (a) Determine the contribution margin in dollars, per unit, and as a ratio. (b) Using the contribution margin technique, compute the break-even point in dollars and in units. (e) Compute the margin of safety in dollars and as a ratio. 300 1