Singha Ltd produces and sells two products, X and Y, using the same type of materials and labour but in different quantities. Budgeted sales units for the next six months (July to December 2022) are as follows:

	July	August	September	October	November	December
Sales units of X	5,000	4,800	4,200	5,600	7,200	8,000
Sales units of Y	2,400	2,500	2,500	4,000	4,400	5,000

The standard selling prices and variable costs of production of each product is provided in the table below.

	Product X	Product Y
	per unit	per unit
Selling Price	60	100
Variable Costs of production
Material A (2 per kg)	6	10
Material B (3 per kg)	12	24
Direct labour (10 per hour)	15	20
Variable production overhead (4 per direct labour hour)	6	8

The management accountant of the company has provided the following additional information.

All sales are on account and the collection pattern are 35% collected in the month of sale; 25% collected in the month following the sale and 40% collected in the 2^nd month following the sale. No bad debts are anticipated and Singha Ltd provides a 1% discount to customers who pay in the month of sale.

Total sales revenue in May and June 2022 were 500,000 and 520,000 respectively.

Company policy is for closing inventory of all finished goods to be equal to 10% of the following months budgeted sales. On June 30^th, there were 500 units of X and 220 units of Y on hand.

Management wants both materials A and B on hand at the end of each month to be equal to 20% of the following months production requirements (usage). On June 30^th there were 5,000 kg of material A and 8,000 kg of material B on hand.

One-half (50%) of a months purchases of materials A and B are paid for in the month of purchase and the other half is paid in the following month.

Singha Ltd has a no layoff policy and all employees are paid for 40 hours of work each week. However, all workers agreed to a wage rate of 10 per hour regardless of the hours worked (no overtime pay). For the months July to December 2022, the direct labour workforce will be paid for a minimum of 12,000 hours per month. Wages for labour are paid at the end of the month for their work.

Variable production overhead is charged to finished goods at the rate of 4 per direct labour hour worked.

Fixed manufacturing overhead is 36,250 per month, including depreciation charges of 1,250. Singha Ltd uses absorption costing principles and fixed manufacturing overhead is applied to units of the products on the basis of direct labour hours worked.

Variable administration & selling expenses are 0.50 per unit of X sold and 1 per unit of Y sold. Fixed administration & selling expenses are 10,000 per month.

All overheads (fixed and variable) are paid for in the month the costs are incurred.

The company will pay a cash dividend of 43,428 as well as purchasing equipment to be used in the business for 180,000 in cash in July 2022.

Singha Ltd maintains a 20% open line of credit for 100,000 and maintains a minimum cash balance of 30,000 per month. All borrowings requirements are made on the first day of the month and repayments are made on the last day of the month.

The cash balance brought forward at 1^st of July is 40,000.

REQUIRED

(a) Prepare Singha Ltd.s Cash Budget for the months of July, August and September 2022 and for the quarter ending 30^th of September 2022 as a whole. All workings must be shown.

(b) Prepare Singha Ltd.s budgeted statement of profit or loss for the quarter (July September) ended 30^th September 2022 using absorption costing.

(c) Critically discuss why Singha Ltd.s cash balance calculated in part (a) may differ from the profit figure calculated in part (b) for the quarter ending 30^th September 2022.