Variable production cost The budgeted variable production cost is $90 per unit, comprising: Direct materials 60 Direct labour 10 Variable production overheads 20 Total variable cost 90 Direct materials: Payment for purchases will be made in the month following receipt of materials. There will be no opening inventory of materials in July. It will be company policy to hold inventory at the end of each month equal to 20% of the following month's production requirements. Direct labour will be paid in the month in which the production occurs. Variable production overheads: 65% will be paid in the month in which production occurs and the remainder will be paid one month later. Fixed overhead costs Fixed overheads are estimated at $840,000 per annum and are expected to be incurred in equal amounts each month. 60% of the fixed overhead costs will be paid in the month in which they are incurred and 15% in the following month. The balance represents depreciation of noncurrent assets. Required: a) Prepare a cash receipts budget schedule for each of the first three months (July -September), including the total receipts per month. (3 marks) b) Prepare a material purchases budget schedule for each of the first three months (July - September), including the total purchases per month. (4 marks) c) Prepare a cash budget for the month of July. Include the owners' cash contributions (4 marks) SHOW YOUR WORKING