2. Copy the master budget you prepared in question 1 and paste into a new sheet in the same Excel file.

Buyers at Jung So Min have come forward with new information from the main supplier of inventory. They are willing to hold the purchase price of the inventory for the first two quarters of 2021, but will be raising the purchase price of the inventory from $36 to $41 in the third quarter.

Required:

3a) What impact will this have on the profit for 2021 and the ability to repay the line of credit or incur additional borrowings, if the selling price charged by Jung So Min does not change?

5b) Do you recommend any change in the selling price charged by Jung So Min, in response to the change in its cost of inventory? Explain your plan (timing of increase, etc) and reasoning in full.