BONG, the maker of industrial liquidating agents, is preparing the budget for $2024.$ The sales department has indicated annual sales of $35,000$ units and the selling price to be set at RM$88$ per unit. The selling price of the product for $2023$ was RM$85.$

The sales department has estimated that the bulk of the sales will be in the $2$nd and $3$rd quarters of the year. For the $1$st quarter, sales will be $10\%$ of the annual sales, the $2$nd and $3$rd Quarters, sales will be $30\%$ and $40\%$ respectively while for remaining will be in the $4$th Quarter. It is expected customers will always pay $100\%$ of their purchases within the same quarter. However, in the $3$rd quarter, $90\%$ will be collected in the quarter and the remaining amount in the next quarter. For the $4$th Quarter, $85\%$ will be collected in the quarter and the remaining amount in the next quarter.

The company intends to have an inventory of finished products of $1,500$ units at the end of the budget year. Each quarter will also require an ending finished inventory in order not to be in a situation of a stock out.

Each product requires $3$kg of raw materials and $4$ hours of labor time to complete. The raw material is RM$10$ per kg and workers are paid RM$7$ per hour. The company will pay $60\%$ of the raw materials purchased in the same quarter year and balance $40\%$ in the next quarter.

The production department intends to have $2,500$ kg of raw materials at the end of the budget year. Each quarter will also require an ending inventory as a precaution against any shortages in the supply of raw materials.

The production requires variable overheads that are set based on direct labor hours. The predetermined rate is RM$1\mathrm{.}50$ per direct labor hour.

Annual Fixed Overhead expenses are as follows: $-$

$1.$ Factory Rent RM $120,000$

$2.$ Depreciation for machines RM $30,000$

$3.$ Factory Maintenance and Cleaning RM $60,000$

Other non$-$manufacturing expenses annually are as follows: $-$

$1.$ Advertising RM $150,000$

$2.$ Salaries RM $360,000$

$3.$ Office Expenses RM $30,000$

$4.$ Depreciation for office equipment is RM $40,000$

$5.$ The rent of the administration building is RM $60,000$

Additional information: $-$

$1.$ The company will be paying the $2023$ tax payable in the $2$nd Quarter of $2024.$

$2.$ An equipment will be purchased in the $1$st Quarter at a cost of RM $1,250,000.$

$3.$ Principal payment to reduce the Non$-$Current Liabilities will be made at every quarter. The amount is RM$12,500$ every quarter. The interest payment of RM$12,000$ will also be paid every quarter. The interest rate for any short$-$term loans will be $8\%$ and the loan must be settled within the same year that it is made. Any extension of payment will need further negotiation with the bank and be treated as a long$-$term loan.

$4.$ It was suggested that the dividend amount is RM$70,000$ and will be paid at the $2$nd Quarter.

$5.$ The number of ordinary shares is $1$ million units. In $2022,$ the average share price is RM$1\mathrm{.}20.$ The average industry PE ratio is $6$ times.

$6.$ The weighted average cost of capital for the company is $10\%.$

Income Statement

$2023$

Sales

$2,500,000$

Cost of Goods Sold

$1,650,000$

Gross Margin

$850,000$

Selling and Administration

Expense

$540,000$

EBITDA

$310,000$

Depreciation

$25,000$

EBIT

$285,000$

Interest Expense

$48,000$

Earning Before Tax

$237,000$

Corporate Tax

$59,250$

Net Income

$177,750$

BALANCE SHEET

$2023$

Current Assets

Cash

$49,250$

Trade Receivables

$70,000$

Raw Materials

$80,000$

Inventories

$200,000$

Total Current Assets

$399,250$

Land

$1,000,000$

Plant and Machines

$1,645,000$

Less: Accumulated

Depreciation

$900,000$

Plant and Machines Net

$745,000$

TOTAL ASSETS

$2,144,250$

Current Liabilities

Trades Payable

$150,000$

$59,250$

Taxes Payable

Total Current Liabilities

$209,250$

Non$-$Current Liabilities

$600,000$

Stockholders$$ Equity

Common Stock

$1,000,000$

Retained Earnings

$335,000$

Total Equity

$1,335,000$

TOTAL LIABILITIES AND EQUITY

$2,144,250$

Required:

$1.$ Prepare a complete Master Budget for $2024.$ This will include the Quarterly Cash Budget, Proforma Income Statement and Proforma Balance Sheet.

$2.$ Prepare a performance analysis on the budget which includes financial ratio analysis, economic value$-$added analysis, and market value analysis, between $2023$ and the budget. Comment and provide suggestions.