(3) TATA Co. Ltd. is to start production on 1 't January 2011. The prime cost of a unit is expected to be Rs. 40 (Rs. 16 per materials and Rs. 24 for labour). In addition, variable expenses per unit are expected to be Rs. 8 and fixed expenses per month Rs. 30,000. Payment for materials is to be made in the month following the purchase. One-third of sales will be for cash and the rest on credit for settlement in the following month. Expenses are payable in the month in which they are incurred. The selling price is fixed at Rs. 80 per unit. The number of units to be produced and sold is expected to be: January 900; February 1200; March 1800; April 2000; May 2,100June 2400 Draw a Cash Budget indicating cash requirements from month to month. CASH BUDGET of TATA LTD. For 6 months from January to June 2011 Month Receipts Opening Balance Cash sales Collection from Debtors Total receipts(A) Payments Creditors Wages Variable Exp. Fixed Exp. Total payment(B) Closing Balance Jan. 24,000 24,000 21,600 7,200 30,000 58,800 -34,800 Feb. (34,800) 32,000 48,000 45,200 14,400 28,800 9,600 30,000 82,800 -37600 March (37,600) 48,000 64,000 74, 400 19,200 43,200 14,400 30,000 -32400 April (32,400) 53,333 96,000 288,00 48,000 16,000 30,000 -5867 May (5,867) 56,000 32,000 50,400 16,800 30,000 -27,600 June (27,600) 64,000 33,600 57,600 19,200 30,000 8,000