Kendy & Sam decided to purchase t$-$shirts and print them with a logo to commemorate a major international sporting event.

Sales

The commemorative t$-$shirts will be sold for shs$,\frac{10}{?}$ each and predicted sates are as follows:

July $9,000t-$shirts

August $18,000t-$shirts

September $22,500t-$shirts

One third of sales will be for cash. The reminder will be on credit with the customer paying the month after sale.

Purchases

The t$-$shirts will cost shs$.6$ each and will be purchased in the month prior to sale. It is expected that $10\%$ of the $t-$shirts purchased will be damaged during the printing process and will not be suitable for sale. The supplier has offered two month eredit.

Capital investment

To print the t$-$shirts with the logo of the sporting event will require the purchase of machine costing shs$,30,000.$ The machine will be bought at the start of the project and paid for in August. The machine will have a five$-$year useful life but no expected residual value. The machine will be used elsewhere in the business at the end of this project.

Expenses

Expenses, excluding advertising, of shs$.20,000$ per month will be incurred each month and paid in the month incurred. Advertising costs of shs$.5,000$ per month will be incurred in each of the months July, August and September and will be paid one month in arrears.

Required:

$($a$)$ Produce a cash budget for the project for each of the three months: July, August and September.

$($b$)$ Explain how management can deal with uncertainty in budgeting.

$($c$)$ Explain the concept learning curve and its advantages towards budgeting.