3. Report 1) Should Lambda Inc. accept the special order? Based on the estimated nancial impact of the special order on the master budget, determine whether Lambda Inc. should accept the special order. Assume that the special order also follows a cash collection schedule identical to that of regular orders under the annual contract. 2) The buyer asks Lambda Inc. whether the special order price can go lower. The buyer wants to minimize the required capital for a massive sales and promotion campaign, which is essentially the material cost of Z350 to the buyer. The buyer proposes to share some of the excess prots from the event. The share for suppliers will be proportional to the cost-saving each supplier can provide to the buyer by participating in the special order. Lambda Inc., considering the proposal, wants to gather accounting information to help decision-making. Lambda Inc. wants to set a low price to increase the expected prot from the prot-sharing as long as the selling price is high enough to avoid a loss in the special order. What is the lowest possible price Lambda Inc. can set for the special order? Use the information available in the base and the alternative budgets. Report Instructions: Your report (i.e., Executive summary) should be one page (1-inch margins, 12 font size, single spacing, New Times Roman font). The report will be evaluated on content, writing, and presentation (grammar, spelling, wordiness, and persuasiveness). Your report should include only the executive summary. Any identication information (e. g., title, author) should be on the header of the document. The executive summary should reveal the problem, solution, and support for the solution. Presenting a context of the budget case without a solution or following support is not an executive summary. Your budgets will be regarded as an appendix of the report. You must refer to the content of your own excel spreadsheet when you need to discuss it in the report. Marking Rubric Possible Marks Follow Instructions: 1) using one sheet for the base case scenario and the other for the alternative scenario, 2) title and the author identication information in the header and the executive summary in the body of one page, and 3) Following other instructions on the submission rocess and deadline Base Budget: 1) no redundant manual inputs of data, 2) consistency between the spreadsheet models and the written report, 3) numerical accuracy fully supported by calculations within an excel spreadsheet, 4) identiable quarterly and annual line items and other components of each schedule, and 5) complete and accurate raw data from the case material Alternative Budget and the Estimation of Cost Behaviour 1) numerical accuracy, 2) use of Excel formulas to estimate the cost behaviour, 3) Discussion of problem, solution, and the logical support of the solution, and 4) writing clarity and style 5) Consistency between the Excel spreadsheet and the report Total Mark Sales Budget Q2 Q3 Q4 Q1 sales unit 4500 units 3500 units 8500units 2500 units selling price $45.00 $45.00 $45.00 $45.00 sales revenue $202,500.00 $157,500 $382,500 $112,500 Cash Collection Budget Q2 Q3 Q4 Q1 sales revenue $202,500 $157,500 $382,500 $112,500 Collection in six month $202,500 $157,500 Production Budget Q2 Q3 Q4 Q1 sales 4500 units 3500 units 8500 units 2500 units 4500 add: closing inventory 420 units 1020 units 300 units 540 units 420 4920 units 4520 units 8800 units 3040 units 4920 units less: opening inventory 540 units 420 units 1020 units 300 units 540 Production 4380 units 4100 units 7780 units 2740 units 4380units direct materials purchase budget Q2 Q3 04 Q1 Production 4380 units 4100 units 7780 units 2740 units Production 4380 4100 7780 2740 PCB Per Unit 1 unit 1 unit 1 unit 1 unit TPU 95A per 3 Gms 3 Gms 3 Gms 3 Gms Total Required 4380 units 4100 units 7780 units 2740 units Total Require 13140 Gma 12300 Gms 23340 Gms 8220 Gms add: closing inventory 410 units 778 units 274 units 438 units add: closing 1230 Gms 2334 Gms 822 Gms 1314 Gms 4790 units 4878 units 8054 units 3178 units 14370 Gms 14634 Gms 24162 Gms 9534 Gms less:opening inventory 438 units 410 units 778 units 274 units less:opening 1314 Gms 1230 Gms 2334 Gms 822 Gms 4352 units 4468 units 7276 units 2904 units 13056 Gms 13404 Gms 21828 Gms 8712 Gms Rate $12.00 $12.00 $12.00 $12.00 Rate $0.20 $0.20 $0.20 $0.20 purchase cost $52,224 $53,616 $87,312 $34,838 purchase cos $2,611.20 $2,680.80 $4,365.60 $1,742.40 Payment Schedule Q2 Q3 Q4 Q1 Total purchase $54,835.20 $56,296.80 $91,677.60 $36,590.40 Cash $32,901.12 $33,778.08 $55,006.56 $21,954.24 Next Quarter 40% $74,300.00 $21,934.08 $22,518.72 $36,671.04 The total payment $107,201.12 $55,712.16 $77,525.28 $58,625.28Labour Budget Production Hour Per Unit (hr) Total hour (hr) Hour Rate Total labour cost C12 4330 units 1 hr 2190 hr $10.00 $21,900 C13 4100 units 1 hr 2050 hr $10.00 $20,500 04 7730 units 1 hr 3390 hr $10.00 $33,900 C11 2740 units 1 hr 1370 hr $10.00 $13,700