Coro Ltd manufactures two products, Quara and Lock. The below data is valid for the year ended 31 December 2020: 

Material prices Material M GHS2 per unit Material N GHS3 per unit Direct labor is paid 10 GHS per hour. The overall production cost is estimated at 200,000 GHS. The overall production cost is included in the product costs using the direct labor hour absorption rate. Sales and administrative overheads are budgeted at GHS 75,000. Each unit of the finished product requires: Quara Lock Material M 12 units 12 units Material N 6 units 8 units Direct labor 7 hours 10 hours The sales manager estimated sales of Quara and Lock in 2020 to be 5,000 and 1,000 units, respectively. Selling prices will be as follows: Quara GHS182 per Unit Lock GHS161 per Unit estimates opening stock of 100 Quara and 200 Locks. The company does not plan to hold any Quara and Lock inventory by the end of 2020. The Production Director estimates opening stocks of raw materials will be 3,000 units of M and 4,000 units of N material. The stocks of these raw materials at the end of 2020 will be as follows: 4.000 units 2.000 units Statement of financial position Summary for the year ended 31 December 2019 are as follows: Stock of finished goods GHS 15.000 Stock of raw materials GHS 20.000 Retained earnings GHS 81.000 Finance Director, Tax payable on profit in 2020 reports that the rate will probably be 30. %. 

Required:

Prepare all functional budgets and budgeted profit or loss statement for the year ended December 31, 2020. (12 points) Managing Director of Coro Ltd, thinks that the process of preparing and presenting the budget is a waste of resources in terms of time. and the money invested in it. He thinks the cost far outweighs the benefits and the company can operate efficiently without any budget. Do you agree with him? Explain why? (6 points)

 The Management Accountant suggested that a cash budget should be prepared in addition to the functional budgets and the budgeted Profit or Loss statement to complete the budgeting process. Meanwhile, he claims he doesn't have enough information to prepare the cash budget. Advise him on the process and sources of information for preparing a cash budget. He thinks the cost far outweighs the benefits and the company can operate efficiently without any budget. Do you agree with him? Explain why? (6 points) 

The Management Accountant suggested that a cash budget should be prepared in addition to the functional budgets and the budgeted Profit or Loss statement to complete the budgeting process. Meanwhile, he claims he doesn't have enough information to prepare the cash budget. Advise him on the process and sources of information for preparing a cash budget. He thinks the cost far outweighs the benefits and the company can operate efficiently without any budget. Do you agree with him? Explain why? (6 points) 

The Management Accountant suggested that a cash budget should be prepared in addition to the functional budgets and the budgeted Profit or Loss statement to complete the budgeting process. Meanwhile, he claims he doesn't have enough information to prepare the cash budget. Advise him on the process and sources of information for preparing a cash budget. claims that he does not have enough information to prepare the cash budget. Advise him on the process and sources of information for preparing a cash budget. claims that he does not have enough information to prepare the cash budget. Advise him on the process and sources of information for preparing a cash budget.