Garden Sculptures presents the following data relating to the expected operations for the months of January to March 2016.

	January	February	March
Credit services provided	$ 8 000	$12 000	$12 400
Receipts from accounts receivable	20 000	30 000	5 000
Cash services	1 950	2 250	3 300
Cash received from the sale of old equipment		2 000
Salaries and wages paid	8 500	8 500	8 500
Depreciation on equipment	500	500	500
Payment for supplies	2 600	3 500	2 800
Cash purchase of new equipment	20 000
Administration costs	2 000	2 000	2 000
Credit purchase of supplies	1 900	2 150	1 890

Required

a. Prepare a cash budget on a monthly basis for the three months ending March 2016. The cash balance at 31 December 2015 was $25 000.

b. Explain how a variance report would help the owner of Jamies Landscapes monitor the entitys cash position.