The managing partner of Namib Gaming (Namib Gaming) has become aware of the disadvantages of static budgets. She asks you to prepare a flexible budget for October 2023 for Bavaria music box. The following partial data are available for the actual operations in August 2023 (a recent typical month). Description (N$) Number of music boxes produced and sold 4,500 Total direct material cost 90,000.00 Total direct manufacturing labour cost 67,500.00 Depreciation & other fixed manufacturing costs 50,700.00 Selling price per music box 70.00 Fixed marketing costs 81,350.00 Assume no opening or closing stock of music boxes. The selling price per music box is expected to increase by 10% in October 2023. The only variable marketing cost is a commission of N$5.50 per unit, paid to the manufacturers representatives, who bear all their own costs of travelling, when entertaining customers around Windhoek. A patent royalty of N$2 per music box produced is paid to NASCAM. Salary increases that will become effective in October 2023 are N$12 000 per year for the production supervisors and N$15 000 per year for sales managers. Over the same period, direct material costs are expected to increase by 10%. The rest of data is expected to remain the same. Namib Gaming uses a normal costing system and does not have standard costs for any of its input. REQUIRED: MARKS (a) Prepare a Flexible Budget for the month of October 2023, clearly showing the budgeted amounts at each of the three-output levels of music boxes: 4000, 5000 and 6000 units. 27 (b) Explain why Namib Gaming might find a flexible budget more useful than a static budget? 3 (c ) Discuss how the budgeting function in Namib Gaming should be structured with regards to motivational and participative aspect of the budgeting process. 12 (d) Give four suggestions on how the budget system could be revised to improve its effectiveness in Namib Gaming and as a way of reinforcing cost control. 8 TOTAL MARKS 50