Prepare a cash budget for each of the six months ended 31 December 2021 (b) Prepare the forecast income statement for the six months ended

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Prepare a cash budget for each of the six months ended 31 December 2021

(b) Prepare the forecast income statement for the six months ended 31 December 2021.

(c) Explain THREE (3) purposes of preparing budget.

Question 3 Mr. Peh intends to start a manufacturing company. The following is the forecast data for the six months ended 31 December 2021. 1. Raw material cost is RM30 per unit of product, 90% of the raw material costs will be paid in the month the materials are used for production and the remainder in the following month. 2. Direct labour cost of RM50 per unit of product is payable in the month incurred. 3. Other variable expenses relating to production amount to RM3 per unit of product. These expenses are paid in the month after they are incurred for production. 4. Fixed expenses relating to sales and marketing totalled RM42,000 per annum, assuming these expenses accrue evenly throughout the year. They are payable every month. 5. Sales and production 2021 Sales (units) July August September October November December 2,100 1,700 2,500 2,700 1,770 1,630 Productions (units) 2,200 2,300 2,300 2,400 2,200 2,000 6. Sales price is RM90 per unit. Customers will pay two months after sales.