QUESTION 2 CH is a building supplies company that sells products to trade and private customers. Budget data for each of the six months to March are given below: Nov Dec Jun (km) KYK ( 250 250 250 280 65 75 OU Credit sales Cash Sales 100 Credil purchases 170 Other operating costs 200 180 90 780 90 200 123 200 123 122 (excluding depreciation) 80 per cent of the value of credit sales is received in the month after sale, 10 per cent two months after sale and 8 per cent three months after sale. The balance is written off as a bad debt. 75 per cent of the value of credit purchases is paid in the month after purchase and the remaining 25 per cent is paid two months after purchase. All other operating costs are paid in the month they are incurred. CH has placed an order for four new forklift trucks that will cost K25,000 each. The schedule payment date is in February The cash balance at 1 January is estimated to be K15,000. Required: Prepare a cash budget for each of the THREE months of January, February and March (6 marks) (b) You have recently been appointed as an assistant management accountant in a large company, PC Co. When you meet the production manager, you overhear him speaking to one of his staff, saying: *Budgeting is a waste of time. I don't see the point of it. It tells us what we can't afford but it doesn't keep us from buying it. It simply makes us invent new ways of manipulating figures. Ifall levels of management aren't involved in the setting of the budget, they might as well not bother preparing one. Required: koIdentify and explain SIX objectives of a budgetary control system. (6 marks) Discuss the concept of a participative style of budgeting in terms of the six objectives identified in part (1) (8 marks) Total (20 marks)