Management Accounting examination past paper Presto Limited makes a single product, with a sales price of 20 per unit. Monthly sales have been constant since January at 200,000 units. A 10% increase in volume is expected in May, and in June a further 10% increase on the previous month. Unit sales then remain unchanged until September, when they fall to a level that is 8% higher than at the start of the year. They are expected to remain at this level until the end of the year. In addition to these sales, there is a special order for 10,000 units, half to be sold in July and half in August. Payment for these is to be made in the month after sale. For other sales, it is assumed that payment for 20% will be received in the month of sale, 50% in the month after sale, and the remainder in the month after that. The finished goods inventory at the end of each month is 20% of the total volume of the following month's sales. Direct production costs per unit are: 2.5 kg of raw material, costing 4 per kg. A constant basic level of raw material inventory is held, with purchases made each month for that month's production. Payment is made to the supplier the following month. 15 minutes of direct labour, at 20 per hour, and paid in month when worked. Annual fixed manufacturing overheads amount to 10,400,000 including depreciation of 2,400,000 and rent of 800,000. Generally, overheads are paid equally each month but the rent is paid quarterly, the first payment being in January. There is a cash balance of 28,000 at the end of March. Required: For the 6 month period from April September (showing each month separately): a) Produce sales budgets in units and in monetary terms. b) Produce a production budget, in units. c) Cost budgets for materials and for direct labour. d) A cash budget, showing receipts, payments and balance at the end of each month