Q-8: Falcon Company manufactures a variety of stationery items among them a famous brand is highlighters. The company has just received an offer from an outside supplier to provide the ink cartridge for the company's highlighters, at a price of $4.80 per dozen cartridges. The company is interested in this offer, since its own production of cartridges is at full capacity. Falcon Company estimates that if the supplier's offer were accepted, the direct labor and variable manufacturing overhead costs of the highlighters line would be reduced by 10% and the direct materials cost would be reduced by 20%. Under present operations, Falcon Company manufactures all of its own highlighters from start to finish. The highlighters are sold through wholesalers at $50 per carton. Each carton contains one dozen highlighters. Fixed manufacturing overhead costs charged to the highlighters line total $250,000 each year. The present cost of producing one dozen highlighters markers (one box) is given below: Direct materials $15.00 Direct labor 10.00 Manufacturing overhead 8.00* Total cost $33.00 Note*: Cost of manufacturing overhead $ 8.00 includes both variable and fixed manufacturing overhead, based on production of 50,000 boxes of markers each year. Required: a) Should Falcon Company accept the outside supplier's offer? Show computations. b) What qualitative factors should Falcon Company consider in determining whether it should make or buy the ink cartridges? Q- 9: The balance sheet of Ahmad Company a distributor of office supplies, as of 31January 2021 is given below. Ahmad Company Balance Sheet 31 Jan 2021 Assets Cash $2,000 AIR 20.000 Inventory 7,500 Plant, machine & Equipment 125.000 154.500 Liabilities AJP $25,500 Notes payable 5,750 Capital stock 102,000 Retained earnings 21.250 Total liabilities & SHE 154.500 Ahmad Company has not budgeted previously, and for this reason it is limiting its master budget planning horizon to just one month ahead-namely, January. The company has assembled the following budgeted data relating to January a Sales are budgeted at $100.000. Of these sales, $30,000 will be for cash; the remainder will be credit sales. One-half of a month's credit sales are collected in the month the sales are made, and the remainder is collected the following month. All of the January 31 accounts receivable will be collected in February b. Purchases of inventory are expected to total $70,000 during February. Sixty percent of all inventory purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the January 31 accounts payable to suppliers will be paid during February c. The February 31 inventory balance is budgeted at $8,000. d. Selling and administrative expenses for February are budgeted at $8,000. These expenses will be paid in cash. Depreciation is budgeted at $3,000 for the month. e. The note payable on the 31 January balance sheet will be paid during February. The company's interest expense for February (on all borrowing) will be $350, which will be paid in cash f. During February, the company will borrow $6,500 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year, Required: 1. Prepare a cash budget for January. Support your budget with a schedule of expected cash collections from sales and a schedule of expected cash disbursements for inventory purchases. 2. Prepare a budgeted income statement for January. Use the absorption costing income statement format