You have been provided with the following relevant information relating to a newly established company that manufactures a range of office furniture, Durban Furniture (Pty) Ltd. The budgeted sales for the calendar year 2024 are expected to be R7 500 000. It is expected that 5% of the sales will be achieved in January, 10% in February and 15% in March. Sales for December 2023 were R1 350 000. On average clients pay 10% in the month of the sale and 85% in the month after the sale. Durban Furniture (Pty) Ltd has a contribution margin of 20%. All variable costs are paid in the month that they are utilized, except direct material which is paid a month in arrears. Direct materials comprise 80% of the total variable costs. There are six people employed in the sales and administration department, each earning a salary of R5 000 per month, which is paid on the last day of the month. The company intends purchasing a machine in January for R1 000 000. A 50% deposit will be required in the month of purchase and the balance is payable in equal instalments over the next two months. The current factory rental is R10 000 per month payable in advance. The company has been notified that there will be a 10% increase in rental from April. Advertising will amount to 5% of turnover per month. The company had a bank overdraft of R500 000 at the end of 2023. REQUIRED: 1. Prepare a cash budget per month for the first quarter of 2024.

2. Identify and comment on the areas of the cash budget that requires managements' attention and recommend actions to improve the cash flow in these areas?