The company has a single product, the details of which are:

Budgeted variable cost per unit

Materials12

Labour (14hours at 6)24

Production overhead8

Selling price per unit90

Administration overhead is 23,000 per month and the fixed production overhead is 15,000 per month including 3,500 depreciation

The factory has a normal capacity of 1,500 units per month. Finished goods stocks are valued at full actual production cost and the budgeted opening stock at 1 January 2001 is 1,200 units valued at 66,500. It is company policy to keep finished stock at constant ratio to the budgeted unit sales of the following month. Extra production over 1,500 units, per month can be achieved by working overtime which means paying labour time the overtime

Expected SalesUnits

December20201,300

January20211,000

February20211,400

March20211,600

April20211,800

May20211,550

Materials are paid for in month following delivery and enough stock is kept to cover the next month'sbudgeted production. Sales are on credit with 30% of debt collected in the month of sale and 67% in the following month, the balance being bad debts. All other costs are paid for in the month they are incurred and no capital expenditure is expected

Required

(a) To prepare single budgeted profit and loss account for the quarter (January, February, March);

(b) To prepare cash budget for each month of the quarter

(c) To reconcile the net cash movement for the quarter to the budgeted profit

Kindly ignore the currency.