Owner Richard is aware that Morning Dew Trailers is experiencing difficulties, and he has hired you, an independent consultant, to investigate. Using your responses to the questions below, prepare a memo to Richard explaining the issues you found and recommendations you developed. Richard is not likely to respond to lots of raw numbers, so develop and include in your letter data visualizations that will convince him to intervene and make the changes that you recommend. 1. Using the provided Excel file, prepare production, purchasing (aluminum), and cash budgets for Morning Dew Trailers for the first six months of 2021. After preparing the budgets: a. Discuss any issues you suspect may exist in Morning Dew Trailers cost estimates, including the costs of aluminum, equipment, and selling and administration costs. b. Discuss any issues you suspect may exist in Morning Dew Trailers financing plans. c. Discuss any issues you notice in Morning Dew Trailers budget preparation procedures. 2. Using the budgets you prepared for the previous question, produce two or three graphs visualizing what you consider to be the most important data to consider, such as: a. Trailer production during the first six months of the year. b. Cash collections and disbursements during the first six months of the year. These are not the only visualizations you can complete. Use your imagination and develop visualizations that help tell your store. Tie these visualizations to one or more of the issues you raised in question 1. 3. Prepare a second and third set of budgets using the stable production schedule suggested by Gabriella. Prepare the production, purchasing (aluminum), and cash budgets. Hold monthly production constant for the two constant levels suggested by Gabriella. It will be helpful to change the format of the production budget to begin with budgeted production rather than budgeted sales. 4. What changes, if any, would you recommend Morning Dew Trailers make to its budgeting procedures, its sales strategies, its production strategies, and its performance evaluation system to improve financial performance, company culture, and relationships between members of the executive team?

EXHIBIT 1. EXHIBIT 6. EXHIBIT 9. ACTUAL AND PROJECTED SALES IN NUMBER OF TRAILERS BUDGETED EXPENSES FOR THE FIRST SIX MONTHS 2021 ACTUAL 2020 AND PROJECTED 2021 SALES Actual Sales 2015 2016 2017 2018 2019 2020 January February March 2020 2021 14,040 15,178 16,311 18,165 20,027 23,789 Aluminum $ 832,320 $ 1,077,120 $ 905,760 Actual Projected Other materials 55,080 269,280 226,440 January 2,023 2,550 Projected Sales 2021 2022 2023 2024 2025 Wages 636,480 1,028,160 1,126,080 February 3,282 4,080 28,560 34,272 41,126 49,352 59,221 Heat, light, & power 132,600 198,900 224,400 March 4,061 5,100 Equipment rental 397,800 397,800 397,800 April 3,305 3,060 Equipment purchases 306,000 306,000 306,000 May 1,790 2,040 EXHIBIT 2. Depreciation 255,000 255,000 255,000 June 919 1,020 FINISHED GOODS INVENTORY Selling & admin 408,000 408,000 408,000 July 778 1,020 Budget: December 31, 2020 1,020 trailers August 623 1,020 April May June September 1,654 2,040 Current finished goods 306 trailers *plus* Aluminum $ 563,040 $ 342,720 $ 244,800 October 1,712 2,040 inventory formula + 20% of the next month's sales Other materials 140,760 85,680 91,800 November 1,468 2,040 Wages 685,440 440,640 244,800 December 2,174 2,550 Heat, light, & power 137,700 112,200 112,200 Total Trailers 23,789 28,560 EXHIBIT 3. Equipment rental 346,800 346,800 346,800 SHEET ALUMINUM Equipment purchases 306,000 306,000 306,000 Trailer requirements 31 square yards Depreciation 280,500 280,500 280,500 EXHIBIT 10. Selling & admin 408,000 408,000 408,000 ACTUAL AND BUDGETED SALES Cost per square yard in the Spring $ 15.30 November 2020 (actual) $ 1,468,000 Cost per square yard in December/January $ 8.16 December 2020 (actual) $ 2,174,000 EXHIBIT 7. January 2021 (budgeted) $ 2,550,000 ACCOUNTS PAYABLE FOR ALUMINUM AND OTHER MATERIALS February 2021 (budgeted) $ 4,080,000 EXHIBIT 4. PURCHASED DURING DECEMBER 2020 March 2021 (budgeted) $ 5,100,000 SHEET ALUMINUM BUDGETED COST A/P: Aluminum $ 714,000 April 2021 (budgeted) $ 3,060,000 $ 8.16 cost per square yard A/P: Other materials $ 153,000 May 2021 (budgeted) $ 2,244,000 June 2021 (budgeted) $ 1,122,000 EXHIBIT 5. EXHIBIT 8. EXHIBIT 11. RAW MATERIALS INVENTORY BANK LOAN DETAILS / MINIMUM CASH BALANCE REQUIRED ACCOUNTS RECEIVABLE COLLECTION SCHEDULE Sheet aluminum on hand 50.0% of the following month's Requested loan amount $ 816,000 Of a month's sales collected in: at the end of each month production needs Loan duration (in days) 90 Month of sale 25% Month following sale 10% Raw materials inventory budget 39,780 square yards Mininum cash balance required by directors $ 102,000 Second month following sale 60% December 31, 2020 - The remainder is uncollectible - EXHIBIT 12. SUGGESTED CONSTANT PRODUCTION LEVELS First suggested level 3,060 Second suggested level 3,570