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SBS$,$ the maker of industrial liquidating agents, is preparing the budget for $2024.$ The sales department has indicated an annual sale of $50,000$ units and the selling price to be set at RM$150$ per unit. The selling price of the product in $2023$ was RM$100.$

The sales department has estimated that the bulk of the sales will be in the $1$st and $3$rd quarters of the year. For the $1$st quarter, sales will be $30\%$ of the annual sales, the $2$nd quarter sales forecast is $10\%,3$rd Quarters sales will be $40\%$ while the remaining sales will be in the $4$th Quarter. In the first quarter, the company expects customers to pay $70\%$ of their purchase within the first quarter and the balance sales will be collected in the $2$nd quarter. In the $2$nd and $3$rd quarters the collection from sales is $90\%$ within each quarter. The $4$th quarter however the collection from sales within that quarter is $60\%.$

The company intends to have an inventory of finished products of $5,000$ units at the end of the budget year. Each quarter will also require an ending finished inventory in order not to be in a situation of a stock out. The ending inventory of each quarter will be $10\%$ of the next quarter$$s unit sales.

Each product requires $4$kg of raw materials and $5$ hours of labor time to complete. The raw materials will cost RM$12$ per kg and workers are paid RM$7$ per hour. The company will pay $70\%$ of the raw materials purchased in the same quarter of the year and balance $30\%$ in the next quarter. In $2023$ the cost of the raw materials was RM$10$ per kg$.$

The production department intends to have $1,500$ kg of raw materials at the end of the budget year. Each quarter will also require an ending inventory as a precaution against any shortages in the supply of raw materials. The ending inventory of each quarter will be $5\%$ of the next quarter$$s raw materials.

The production requires variable overheads that are set based on direct labor hours. The predetermined rate is RM$2\mathrm{.}50$ per direct labor hour.

Annual Fixed Overhead expenses are as follows: $-$

$1.$ Factory Rent RM $125,000$

$2.$ Depreciation for machines RM $36,000$

$3.$ Factory Maintenance and Cleaning RM $69,000$

Other non$-$manufacturing expenses annually are as follows: $-$

$$Advertising RM $100,000$

Salaries RM $450,000$

$$ Office Expenses RM $30,000$

$$ Depreciation for office equipment is RM $40,000$

$$ The rent on the administration building is RM $60,000$

Additional information: $-$

The company will be paying the $2023$ tax payable in the $1$st Quarter of $2024.$

An equipment will be purchased in the $4$th Quarter at a cost of RM $60,000.$ The company intends to take a long$-$term loan of RM$50,000$ to purchase the equipment.

Principal payment to reduce the Non$-$Current Liabilities will be made at every quarter. The amount is RM$12,500$ every quarter. The interest payment of RM$12,000$ will also be paid every quarter. The interest rate for any short$-$term loans will be $8\%$ and the loan must be settled within the same year that it is made. Any extension of payment will need further negotiation with the bank and will be treated as a long$-$term loan.

It was suggested that the dividend amount would be RM$750,000$ and will be paid in the fourth Quarter.

The number of ordinary shares is $1$ million units. In $2022,$ the average share price is RM$1\mathrm{.}20.$ The average industry PE ratio is $6$ times.

The weighted average cost of capital for the company is $10\%.$

$$

$$Required:

Prepare a complete Master Budget for $2024.$ This will include all the budgets in the Manufacturing Budget, the Quarterly Cash Budget, Proforma Income Statement and Proforma Balance Sheet.

$$Prepare a performance analysis on the budget which includes financial ratio analysis, economic value$-$added analysis, and market value analysis, between $2023$ and the budget. Comment and provide suggestions.

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