QUESTION 3 (15 marks) (18 minutes) Mogomo Limited manufactures and sells one type of a household bin. The company is preparing budgets for the third quarter of 2020 and has gathered the following information to assist in the budget preparation: (a) The marketing department estimates that sales for the next three months will be as follows: Units July... 2 250 August... 2 500 September.. 2 750 [TURN OVER] CONFIDENTIAL Page 5 of 6 MAC1501 MAY/JUNE 2020 The selling price of the bin is R250 per unit. (b) 50% of the sales are on credit. Credit sales are expected to be collected as follows: 25% in the month of sale, 75% in the month following the sale. The accounts receivable on 01 July 2020 in respect of sales during June will be R350 000. (c) The company normally maintains finished goods inventories equal to 750 units. The closing inventory at the end of June is expected to be equal to 450 units, but it will normalise in July. REQUIRED: 3.1 Prepare the sales budget in Rands, by month (i.e. July, August and September), for the (3) quarter. 3.2 Calculate the expected cash collections from customers, by month (i.e. July, August and (6) September), for the quarter. 3.3 Prepare the production budget in units, by month (i.e. July, August and September), for (4) the quarter 3.4 List two reasons for holding cash. (2) (15)