Kollegg's produces cornflakes and sells its products to wholesalers. At the end of February, the head of the finance department asks you as the new management accountant to prepare a cash budget for the month of March. You collect the following information: The accounting system at Kollegg's differentiates between direct material costs of corn, variable manufacturing overhead costs with the cost driver machine hours and one cost pool of fixed costs. Direct materials: To produce one package of cornflakes, 1.1 kg of corn is required and the average purchase cost of 1 kg of corn is 0.50 Euro. Variable manufacturing overhead costs vary with machine hours used in production. 400 packages of cornflakes can be produced in one machine hour and the budgeted cost per machine hour is 150 Euro. Fixed costs are expected to be 750,000 Euro per month which includes depreciation of 100,000 Euro. The budgeted selling price per package of cornflakes is 2.00 Euro. The following table shows the actual and budgeted sales in Euro) for the first quarter of the year: Month January (actual) February (actual) March (budgeted) April (budgeted) Sales 4,400,000 Euro 3,400,000 Euro 5,200,000 Euro 4,000,000 Euro Experience has shown that 20% of the billings are paid by the wholesalers in the month of the purchase, while the rest is being paid in the month after the purchase. Kollegg's buys the direct material corn from one supplier. Actual purchases of corn in January were 1,155,000 Euro and in February 1,034,000 Euro. Kellogg's pays 40% of the corn purchases in the month of the purchase and 50% in the month after the purchase. The remaining 10% are overdue and paid in the second month after the purchase which causes an additional handling fee of 5% of this overdue amount. All other costs are paid as incurred. Kollegg's does not keep any stock of finished packages and the produced quantity equals the sold quantity of cornflakes. However, it keeps stock of the raw material corn and requires a target closing stock of corn at the end of each month of 20% of the expected amount of corn to be used in production in the next month. The ending balances of February show the following information: Cash Stock of corn (valued at 0.50 Euro per kg) 300,000 Euro 286,000 Euro Question 1. Calculate the budgeted amount of corn to be purchased in March. Please also explain how you make the calculation. Question 2. Prepare a cash budget for March which shows all cash receipts, disbursements, and the closing cash balance. Please explain how you calculate the cash budget