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On the other hand, managers in Silk Road need to overcome some financial problem such as: Lack of liquidity, sometimes Silk Road LLC experiences high

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On the other hand, managers in Silk Road need to overcome some financial problem such as: Lack of liquidity, sometimes Silk Road LLC experiences high level of profits but at the same times has a cash problem because top managers adopt credit selling strategy (selling on account) and they accept paying cash for raw materials purchases!! They argue that paying in cash helps the company earn valuable discounts on purchases. - Changing demand level: sometimes Silk Road experiences good times in which the demand level increases beyond top managers' expectations, while in others, demand level decreases causing excess inventory costs. |- Depreciated exchange rate of Turkish lira, which affects the costs of machines, direct and indirect manufacturing materials. Considering these related operation data: Sales proposal for the budget period are: Budget selling price for a unit of fabric is $100 and budget sales quantity is 10,000 units Direct Labour and cost estimates Expected direct labour usage Expected direct labour rate p/hour (hours) Design 0.5 $8 Weaving & Knitting 1.5 $ 10 Printing 2 $11 Direct materials usage and cost estimates per unit of fabric produce are: Expected direct materials usage Expected direct material price per (units) unit Wool 4 units $ 2 Dye 2 units S5 Wool 700 4200 Inventories for the next year: Starting 1 January and ending 31 December are estimated as follows 1 January 31 December Quantity Value (5) (units) End of year quantity (units) of cach raw material estimated at 1000 1500 10% more than respective opening quantity Dye Finished 400 End of year quantity (units) of finished product fabric estimated 20000 Fabric at 15% more than opening quantity You work for Silk Road as a Management Accountant where you are responsible for preparing budgets and using effective planning tools that help the senior managers overcome financial problems and achieve the organizational sustainable success. In a form of managerial report, you will: 1- Prepare the following budgets for the year ending 31 December 2021: 1.1. Sales and production budget. 1.2. Direct material budget. 1.3. Direct labor budget. 2- Explain the advantages and disadvantages and analyse the use of different types of planning tools for preparing and forecasting budgets for Silk Road. 3- Compare how Silk Road LLC can adapt management accounting systems to respond to financial problems. Compare, analyse, and evaluate how management accounting systems and planning tools respond appropriately to -4 solving financial problems to lead Silk Road to sustainable success

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