These questions are qualitative and dependent on first establishing any kind of a master budget. The answers should be 4-5 sentences each at minimum and fully explain the reasoning behind them.

Supplemental Questions: Complete these after you have finished building your master budget based on the assumptions in the next section 1. After detailed analysis, the ILA Company decided that they would move to an activity based accounting system for allocating overhead. ILA Company determined that they would use the following activity based overhead driv 45% of the overhead to orders 10% of overhead to raw material (based on total pounds) 40% of overhead to labor hours 5% of overhead to company sustaining (not specific to the individual products) WITHOUT CREATING NEWSCHEDULES or BUDGETS, please discuss (in general terms) what impact these new activity based drivers (verses the current plant wide overhead rate) would have on Company profits? Individual product profitability? 2. Walmart has asked the company to produce Product B under the Walmart label. This order ould be incremental to their current production plan. With the deal, ILA Company has determined that they would be able to sell 20% more than they currently sell in quarters two and three, but would not sell any more in quarters one and four The company would not incur any additional overhead or general administrative costs Ci.e. overhead and GAA would not increase or otherwise be impacted by this decision) If they could sell each unit for a unit price of$47.00, should they take the deal? If you answered yes, at what price would it NOT make economic sense to take the deal? If you answered no, at what price would it make economic sense to take the deal? What other factors should ILA Company consider before taking this deal? 3. Discuss the pros and cons of outsourcing ILA seasonal help. Would you advise them to continue outsourcing or build the necessary infrastructure "in house 4. ILA Company issued common stock to partially pay for cash flow needs in year two. Would you have issued stock or taken out a larger loan? What are the pros/ cons of stock vs. debt financing 5. ILA has more sales in Q1 and Q4, than in Q2 and Q3. Why are the cash flows from operations negative in both of those quarters when the cash flows are positive in Q2 and Q3? 6. The allowances for bad debt balance changed from year one balance sheet to the year two balance sheet. How much did it change? Give some analysis as to what might have happened to make the balance change in this manner? 7. What advice would you provide the company to increase net income