Question 4.2.1. please, thank you so much.

QUESTION 4 (20 marks) This question consists of two separate parts, both of which must be answered. PART 4.1 {13} Moqomo Limited manufactures and sells one type of a household bin. The company is preparing budgets for the fourth quarter of 2021 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 October .............................................................................................. 2 250 November ........................................................................................... 2 500 December ............................................................................................ 2 750 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 month sale. The accounts receivable on 01 October 2021 in respect of sales during September will be R350 000. (c) The company normally maintains nished goods inventories equal to 750 units. The closing inventory at the end of September is expected to be equal to 450 units, but it will normalise in October. REQUIRED: 4.1.1 Prepare the sales budget in Rands, by month (i.e. October, November and December), (3) for the quarter. 4.1.2 Calculate the expected cash collections from customers, by month (i.e. October, (6) November and December), for the quarter 4.1.3 Prepare the production budget in units, by month (i.e. October, November and (4) December), for the quarter PART 4.2 {7} The following efciency ratios, based on the audited nancial statements of Moqomo Limited, are presented to you: 2019 2020 Debtors' collection period 20 days 25 days Inventory turnover ratio 4,2 times 4,8 times REQUIRED: 4.2.1 Write down the formulas that are used to calculate the debtors' collection period and the (2) inventory turnover ratio. 4.2.2 What does the debtors' collection period and inventory turnover ratio indicate to an (2) analyst? 4.2.3 Discuss in full your interpretation of the debtors' collection period for 2020. (2) 4.2.4 Name one risk of carrying too much inventory. (1)