QUESTION 3 A newly formed kit car company will commence operations in January. The following estimates have been prepared for the next four months: January February March April Sales (kits) 30 5 45 75 60 Production (kits) 40 60 40 vo 100 2500 4500 There will be nil stocks (kits) at 1 January. Stocks (raw material) to have the value of $20,000 to be in stock at 31 January and continuously thereafter. SI.500 Selling price (per kit) Cost per kit Material Labour Variable overhead 700 400 100 Pixed overhead will be $11,500 per month Plant and Machinery S100,000 of plant to be purchased payable as follows: February S50,000; April $25,000: June $25,000. Sw , Depreciation is to be charged at $1,500 per month. X = 500 15 0-0 25-07506 Trade Terms 1500 x 15 =1125 Sales - 50% cash, the balance to be payable 2 months later. Labour -- cash. All other expenditure - 2 months' credit. Required a. Prepare a cash budget for the 4 months to April, Showing clearly the balance (or overdraft) at each month end. b. State how many kits will be in stock at 30 April