1. Krafedge Sdn Bhd (KESB) was established in 2013. Its main activity is the construction of portable cabins. Most of its customers are local. En. Mustafa is the founder of KESB and also acts as the sales representative. Recently, he has met with a few prospective clients who are interested in buying the cabin. Prior to December 2023, KESB only sold 10-foot cabins. However, in December 2023, KESB found a new supplier that could supply a 20-footer cabin immediately. En. Mustafa estimates that the following sales for the next three months will include both sizes of cabins. The selling price per unit and the budgeted sale units of the portable cabin are as follows: The budgeted sale units are Portable Cabin 10-footer unit 20-footer unit December 2023 CONFIDENTIAL Month Jan 2024 Feb 2024 Mar 2024 The opening cash balance on January 1, 2024, is estimated to be RM25,000. DAC5013 ACCOUNTING FOR CORPORATE DECISIONS AND EVALUATION The KESB debtor's collection pattern shows that: 70% pay their invoice within the month of sale. 20% pay their invoice in the following sale. 10% pay their invoice in the two-month following sale. Month Purchase (RM) Required: Per unit (RM) 5,500 8,000 Budgeted sales in units 20 units (10-footer) 10 units (10-footer) 5 units (20-footer) 10 unit (10-footer) 10 units (20-footer) 12 units (10-footer) 15 units (20-footer) For the above-budgeted sales, the procurement department comes out with the purchase budget as follows: Details In the month of purchase Following month of purchase KESB monthly obligations comprise of: 1. Salaries - RM50,000 CONFIDENTIAL All purchases are based on credit terms. KESB settles its creditors accounts as follows: Dec 23 Jan' 24 Feb' 24 Mar 24 100,000 70,000 80,000 95,000 2. Fixed overheads - RM5,000 3. Variable overhead - RM22,000 (include depreciation RM2,000). Percentage of payment 80% 20% 2/7 Recently, KESB won a case that would entitle them to a compensation of RM30,000, which they are expected to receive in January. Taxation of RM20,000 will be settled in February (RM15,000) and the balance in March. a) Prepare the cash budget for January, February, and March of 2024. DAC5013 ACCOUNTING FOR CORPORATE DECISIONS AND EVALUATION (30 marks) 3/7 b) Explain the budget committee and their roles in presenting effective budgeting. (10 marks) c) KESB is planning to launch a new cabin product for the local and foreign markets. Advise KESB using Porter's five forces model. (10 marks)