Morris Ltd, a new manufacturing business started production on 1 March 2023. Sales are planned to start in March and to be as follows for the rest of the year: Month Sold units March 450 April 620 May 690 June 820 July 900 August 810 September 785 October 700 November 615 December 495 The sold unitsMorris Ltd, a new manufacturing business started production on 1 March 2023. Sales are planned to start in March and to be as follows for the rest of the year:

Month Sold units

March 450

April 620

May 690

June 820

July 900

August 810

September 785

October 700

November 615

December 495

The sold units shall be sold at 120.

Morris intends to sell all products on credit and provide a cash discount of 3% to customers who pay before the end of the month in which the sale was made. 50% of the units sold are expected to be eligible for the discount, while for the other 50%, 95% of customers are expected to pay during the month after the sale. The remaining percentage of sales is expected to be considered bad debt.

The sufficient finished goods inventories for each months sales should be available at the end of the previous month.

Morris will buy raw materials with the intention of having enough inventory at the end of each month to meet the planned production for the following month. This policy will start from the end of February. Raw materials will be purchased with a two-month credit, meaning the company pay for them in the third month after purchase. The cost of raw materials is 50 per finished product unit.

The direct labour cost, which is variable with the level of production, is planned to be 25 per unit of finished production.

Production overheads are planned to be 25,000 each month, including 3,000 for depreciation.

Non-production overheads are planned to be 12,000 a month of which 2,000 will be depreciation.

Various fixed assets costing 275,000 will be bought and paid for during March.

Except where specified, assume that all payments take place in the same month as the cost is incurred.

The business will raise 270,000 in cash from a share issue in March.

Required:

1. Produce a cash budget for six months ended August 2023. Please show all working