Somerset Cider Ltd specialises in the manufacture of dry cider. The one litre bottles sell for 3.50 each, with 30% of the sales on cash terms and 70% on one months credit. The budget shows the following sales volumes:

Month	Litres of Cider
August	380000
September	300000
October	350000
November	280000
December	340000
January	290000

You are given the following additional information:

(i) The companys policy is for opening inventory of cider to equal one-fifth of each months budgeted sales volume, but the inventory on 1st September was actually 100,000 litres.

(ii) For inventories of apples, the policy is for opening inventory to equal 50% of each months usage. On 1st September, the inventory of apples was actually 2,000 tonnes.

(iii) On average, 15 kilogrammes (kg) of apples are needed to produce 1 litre of cider (1 tonne = 1,000 kg). The cost price of apples is 75 per tonnes in September and October, but is expected to increase to 100 in November and December as they have to be imported.

(iv) Direct labour costs are 0.20 per litre and fixed overheads are 35,000 per month (including 7,500 for depreciation).

(v) Payment for apples is made two months after purchase, but all other expenses are paid for one month after being incurred.

Required:

(a) For the months of September, October, November and the quarter as a whole, prepare the production budget (in litres of cider) and the apple purchases budget (both in tonnes and ).

(b) For November only, prepare the cash budget. Assume that the bank balance on 1st November was 395,000 overdrawn.