QUESTION III. 20 MARKS Myrna Manufacturing, located in Montreal, has projected sales in units for four months of the rst year of operations as follows: January 25,000 February 30,000 March 32,000 April 35,000 The product sells for $18 per unit. Twentyve percent of the customers are expected to pay in the month of sale and take a 3% discount; 70% are expected to pay in the month following sale. The remaining 5% will never pay. It takes 2 kilograms of materials to produce a unit of product. The materials cost $0.75 per kilogram. In January, no raw materials are in beginning inventories, but managers want to end each month with enough materials for 20% of the next month's production. The rm pays for 60% of its materials purchases in the month of purchase and 40% in the following month. It takes 0.5 hour of labour to produce each unit. Labour is paid $15.00 per hour and is paid in the same month as worked. Overhead is estimated to be 2.00 per unit plus $25,000 per month (including amortization of $12,000). Overhead costs are paid as they are incurred. Myrna will begin January with no nished goods or work~in~process inventory. The managers want to end each month with 25% of the following month's sales in nished goods inventory. They will end each month with no work in process. REQUIRED: Prepare a cash budget listing cash receipts and disbursements for February and the ending balance of cash. The rm will begin Februm with a cash balance of $80,000