Question
abu Enterprise sells packaged baby foods for $50/unit and is preparing budget for the 1st quarter of 2020. His actual and budgeted data include: Details
abu Enterprise sells packaged baby foods for $50/unit and is preparing budget for the 1st quarter of 2020. His actual and budgeted data include: Details . . . . . . . . . . . . Nov 2019 . . . Dec 2019 . . . Jan 2020 . . . Feb 2020 . . . Mar 2020 . . . Apr 2020 . . . May 2020 Production in units . . . . . 5700 . . . . . . 8100 . . . . . . 4400 . . . . . . 5700 . . . . . . . 6300 . . . . . . 5100 . . . . . . 6200 Each unit of product requires 10 kilograms of raw materials to produce. And Babu keeps an ending inventory of raw materials equal to 40% of the following months production needs of raw materials. The price of raw material is $3/kilogram. An advance payment of 40% is to be made a month prior to purchase. 30% is paid in the month of purchase. The rest is paid in the month following purchase. Instructions: For the 1st quarter of 2020, prepare: (A) Direct Materials Budget (5 marks), (B) Cash Payment (disbursemeExplain (in your own words)
a) Why should Babu seek cooperation of other business functions while preparing budgets? [2 marks]
b) Among ROI, RI and Balanced Scorecard, which one is the most preferable measure of measuring the performance of a decentralized organization? why and why not? [2+3=5]nt) Schedule for Raw Materials (5 marks) and (C) Calculate the balance of accounts payable at the end of the first quarter of 2020 (2 marks) .
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