The cost of one unit of Elevating Pot is budgeted at RM144 for 2022. This consists of the following:

	RM
Direct material	24
Direct labour	30
Variable production overhead	14
Fixed production overhead	36
Variable selling and distribution overhead	10
Fixed selling and distribution overhead	30
	144

The fixed overhead is absorbed into the product cost on the basis of budgeted annual production and sales. RM16 per unit of fixed production overhead, and RM12 per unit of fixed selling and distribution overhead is included for budgeted depreciation.

Direct materials are delivered and paid for in the month used. Overhead costs are also paid for in the month incurred, but direct wages are paid one month in arrears.

The Statement of Financial Position as at 2022 included the following:

	RM
Trade receivables 2 months sales at RM160 per unit	128,000
Cash in hand	4,000

You are required to:

1. Prepare a quarterly Cash Budget for Year 2022 for Jackyln Bhd. (15 marks)

2. Calculate the annual break-even sales in RM000. (2 marks)

3. It is widely recognized that budget setting can be mishandled in organizations and may result in some undesirable effects that work against an organizations best interests. Give two (2) potential problems that may arise if budgeting is not handled properly. (3 marks)