1. Company A sells its products to Thailand, Singapore, Japan and the Philippines via distributors in each country. The company also sources materials for its products from various countries. Drone expects that the prices of the materials it uses will increase due to a rise in demand for these materials. You have been tasked to prepare the master budget (ie. all the budgets) for the coming year 2021.

a. What information, data, assumptions and predictions would you require to prepare the budgets and explain why you need them.

b. Company A discovered that some of the budgets have been padded in the past. What affect would this have on the company and what can the company do to overcome this problem?