Stella & Co., a manufacturer of pandora beads, is preparing monthly cash budgets for the month of April and May 20X2. The following data are available from the records of the company

	RM	RM
Sales	250,000	225,000
Raw Materials purchases	115,000	130,000
Direct labour	65,000	70,000
Manufacturing overhead costs	35,000	40,000
Selling and administrative expenses	45,000	55,000

The company has the following business policies:

Collection from customers is expected to be 60% of the sales in the month of sale and 40% in the month of following the sale.

The company pay cash for 30% of the raw materials purchase in the month of purchases and the balance is due in the month following in the purchase.

All other items besides these two are paid in the month they are incurred.

Other pertinent information are as follows:

Sales: March 20X2, RM250,000.

Purchases of raw materials: March 20X2, RM195,000

Other receipts:

- April: Donation received, RM2,000.00

- May: Proceeds from the disposal of used equipment, RM2,500.00

Other payments:

- April: Debt repaid, RM 10,000.00

- May: Purchase of an equipment, RM5,500.00

The companys cash balance on 1 April 20X2 is estimated to be RM30,000.00. the company must maintain a minimum cash balance of RM25,000.00 in the end of May 20X2.

(20 marks)