Rizky Company expects to have a cash balance of RM135,000 on January 1, 2021. Relevant monthly budget data for the first 2 months of 2021 are as follows: Collections from customers: January RM246,500, February RM435,000. Payments for direct materials: January RM155,000, February RM240,000 Direct labor: January RM90,000, February RM135,000. Wages are paid in the month they are incurred. Manufacturing overhead: January RM63,000, February RM75,000. These costs include depreciation of RM5,000 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January RM45,000, February RM60,000. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize RM36,000 in cash. Rizky Company has a line of credit at the local bank that enables it to borrow up to RM75,000. The Company wants to maintain a minimum monthly cash balance of RM60,000.

b. Rizky Companys chief financial officer feels that it is important to have data for the entire quarter especially since their financial forecasts indicate some difficult economic periods in the coming year. March information has been budgeted as follows:

Collections from customers: RM375,000

Payments for direct materials: RM206,000

Direct labor: Wages paid in March RM116,000

Manufacturing overhead: RM64,500. This includes the monthly depreciation of RM5,000.

Selling and administrative expenses: RM51,600. This cost is exclusive of depreciation.

Marketable securities of RM50,000 can be sold if needed for additional cash.

i. Prepare a cash budget for March assuming that the Company does not sell the marketable securities.

ii. What is the maximum amount the Company can borrow during March? Does this provide the Company with an adequate ending cash balance?

iii. How much does the Company need to borrow if the marketable securities are sold?

iv. Comment on the status of the Companys cash budget for March.