Babu Enterprise sells packaged baby foods for $70/unit and is preparing budget for the 1st quarter of 2020. His actual data of 2019 and budgeted data of 2020 include: Details . . . . . . . . . . . . Nov 2019 . . . Dec 2019 . . . Jan 2020 . . . Feb 2020 . . . Mar 2020 . . . Apr 2020 . . . May 2020 Sales in units . . . . . . . . . . 5100 . . . . . . 8500 . . . . . . 4500 . . . . . . 5700 . . . . . . . 6700 . . . . . . 4900 . . . . . . 6300 Owing to fall in demand selling price will be reduced by 10% in February. 50% of sales are cash sales and the remaining are credit sales. Credit sales are collected in the month following sales. Babu expects to keep an ending inventory level of 20% of the following months budgeted sales. Instructions: For the 1st quarter of 2020, prepare: (A) Sales Budget (3.5 marks), (B) Expected Cash Collection Schedule (3.5 marks) and (C) Production Budget for the 1st Quarter of 2020 (5 marks).

Explain (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]