Question Senora Co. Ltd. has prepared the following sales schedule (in units) for the next six quarters: Q1: 2000 Q2: 5000 Q3: 4000 Q4: 1000 Q5: 2500 Q6: 6000 Production policy requires production to meet the current quarter's sales plus 25% of the following quarter's sales. The process requires 2 kg raw materials per unit of product. The current cost of the raw material is $3/kg but this is expected to increase by 5% at the beginning of the second quarter. Raw materials inventory policy requires that purchases cover current needs and provide for 20% of the next quarter's production needs. At the beginning of the first quarter both finished goods and raw materials inventory balances are expected to be at the required policy levels. The company is a family owned business and has not changed much (in terms of management practices) since its inception over 25 years ago. The firm's financial performance has been unsatisfactory and its employees are de-motivated. Required a. b. C. Prepare the production budget on a quarterly basis for the first five quarters and raw materials purchases budget (units and dollars) on a quarterly basis for the first four quarters. You have been hired as a management consultant to revive the whole business. Suggest a responsibility centre designation for the company, the purchasing department, and the production department. Justify your choices. If management implements your advice in part (b), how will that improve the company's budget performance (i.e., indicate behavioural implications)? (12+6+2 20 marks)