The use of short term tactical planning or budgetary control is one of the main factors contributing to the financial success of Upgrade International Ltd. This process is used to convert the long term or Corporate Plan into action. As the management accountant you are integrally involved in the process. The company produces two (2) products "Busty" and "Crusty". At the quarterly budget committee meeting on December 10,2018 you were presented with the following sales forecast for 2019:

Sales Forecast 2019 Details Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Busty 2,000 2,500 3,000 2,400 9,900

Crusty 4,000 3,600 4,200 3,600 15,400

Notes: (a) The company planned to sell one unit of Busty for $500 and one unit of Crusty for $300 during 2019. (b) The company expected sales for the first quarter of 2020 to be 20% more than the last quarter of 2019.

(c) The closing stock level for both products at the end of each quarter is to be held at a level equal to fifteen percent (15%) of the budgeted sales for the next quarter.

(d) It takes two units of raw material Gerco to produce one unit of Busty, while three units of raw material Heco are used to produce one unit of Crusty.

(e) The cost of raw material Gerco was $105 per unit while one unit of raw material Heco was purchased for $70. The company has decided that raw material stocks at the end of each quarter should be held equivalent to ten percent (10%) of the budgeted sales for that quarter.

(f) At the start of Quarter 1, 2019 there were 800 units of Gerco and 900 units of Heco in store.

Required:

The production budget for 2019.

The direct materials purchases budget for 2019

What two (2) benefits could Upgrade International Ltd derive from engaging in the budgetary process.

As the Management Accountant define two (2) of your roles in the budgetary process.