INFORMATION

The following information was provided by Peppe Ltd:

The budgeted sales schedule for the five months ended $31$ March $2024$ is as follows:

Cash sales account for $70\%$ of the total sales. Sixty percent $(60\%)$ of the cash sales is subject to a

discount of $10\%.$

The balance of the sales is on credit and these customers pay two months after the sale.

The monthly purchases of materials equals $25\%$ of the sales value $($excluding discounts$)$ of the same

month but are paid for in the month after the purchase.

Fixed costs are estimated at R$36000$ per month and they are payable in the month in which they are

incurred. The fixed costs exclude depreciation of R$14000$ per month.

Variable manufacturing overheads, which are paid monthly, amount to R$60000$ for December $2023$ and

are expected to increase by $10\%$ each month.

Marketing overheads are expected to amount to R$30000$ for December $2023$ and are calculated as a

percentage of the sales $($excluding discounts$)$ for December $2023.$ The same percentage of sales

applies to the marketing overheads for the next three months. Marketing overheads are paid for in the

month after they are incurred.

Production salaries and wages are $R80000$ per month and are paid for in the applicable month. An

increase of $8\%$ is expected with effect from $01$ February $2024.$

A machine that costs R$100000$ is expected to be purchased on credit on $28$ February $2024.$ A deposit

of R$20000$ will be paid on $28$ February $2024$ and the balance plus finance charges of R$2000$ will be

paid in five equal monthly instalments commencing March $2024.$

Interest at a rate of $12\%$ per year is payable monthly on a loan from Gen Bank. The loan balance is

expected to be R$192000$ on $31$ December $2023.$ The loan agreement stipulates that instalments of

R$24000$ plus interest be made at the end of each month.

A favourable bank balance of $R80000$ is expected on $31$ December $2023.$