Case 4: Fiza LLC is a leading manufacturer of disposable Personal Protective Equipment (PPE) kit. The company was operating at 50% capacity during January and February 2020. As a result of the spread of COVID-19 pandemic, the company received huge amount of orders from various clinics and hospitals in Oman. The management decides to increase its production capacity for the coming months. Initially they plan to increase the capacity by 25% but as orders increase day by day, to meet the increasing demand the company decides to operate at full production capacity. Imagine you are the management accountant and management wants you to present the budgeted expenses corresponding to the different levels of activity. You have the following information before you: Production units at current activity level Materials Labour Expenses (Direct) Factory expenses RO 38,000 (40% fixed) Administration expenses RO 36,000 (60% fixed) 7500 units RO 800 per unit RO 30 per unit RO 25 per unit You are required by management to: a. Advice on what type of budget is best suitable for planning purpose based on the above situation. Give your reasons on the suggestion you make. (150 words) (2 marks) b. Prepare the budget you suggest with change in the level of activity after COVID 19 crisis. (5 marks) c. Do you think a fixed budget would be ideal in this situation? Why? (150 words) (2 mark) d. Referring to the case given to you, compare a fixed budget with the budget you suggest. Explain by giving three reasons on the suitability of budget you choose for planning. (300 marks) (6 marks) (Total 15 marks) ALL THE BEST