Question 1: Humbro Ltd is planning to produce and launch a limited edition board game based on an Olympic theme. You have been given the task of managing the new product launch. The Financial Director wishes to review the proposed costs and revenues before identifying an appropriate marketing strategy. You have put the figures together for the six months to June 2017. 1. Projected unit Sales are: January 3,000 February 4,000 March 4,000 April 5,000 May 8,000 June 9,000 Selling price per unit is 50. 70% of sales are for cash with the remainder on two months' credit. 2. The company will produce amounts equal to the expected sales each month. Inventory levels are expected to remain constant throughout the period. 3. Raw Material costs are 5 per unit. Purchases of Raw Materials are paid 60% cash and 40% one month after purchase. 4. The Direct Labour rate is 8 per hour and it takes three hours to produce each unit. All wages are paid in the month of production. 5. Variable Production overheads are 1 per labour hour and are paid in the month of production. 6. Other monthly costs are: Selling and Distribution 2,000 Production Manager's Salary 2,500 Quality Manager's Salary 1,500 7. Fixed Production Overheads per month are: Insurance 200 Power 500 Business Rates 900 Depreciation 500 Other 400 These are paid in the month of production. 8. An initial bank balance of 20,000 is in place. Assessment task: You are required to prepare the following information: (a) A Cash Budget for the six month period to June 2017. (b) The break-even point calculation in Sales units and revenue.