PLEASE IN DETAILS

You have been given the task of preparing a cash-flow forecast for the six month period from July to December 2022 based on the following information: The company only sells one product which they sell for 80 and which has a variable cost made up as follows: - Materials 40 Labour 8 Production Overhead 4 - Fixed costs of 12,000 are incurred per month and are also paid every month. - Quantities to be sold on credit: - Production quantities are expected to be: - Cash sales are expected to be 100 units each month, with the price reduced to 76 each. - Customers are expected to pay their accounts in the second month following sales. - Suppliers are expected to be paid two months after materials are used in production. - Wages (for labour) are paid in the month they are incurred. - 70% of the production overhead is paid in the month of production and the remainder the following month. - The company expect to pay Local Authority charges of 36,000 in October. - A new machine costing 8,000 will be delivered in July and paid for in August. They will sell an old machine for 600 and expect to be paid in July. You ascertain that at the end of June 2022 the company expect to be overdrawn by 3,000 i.e. the company will start the 1st July 2022 with a bank overdraft of 3,000. Required: (a) Prepare a Cash Flow Budget for each of the months from July to December 2022. (15 marks) (b) Highlight for Management the months when the Cash Flow projection shows they might need an overdraft. (2 marks) (c) Critically discuss the importance of Cash Flow budgets for businesses. (5 marks) (d) Explain why depreciation is not a cash flow