Mishal LLC is a new startup in the retail manufacturing business of fruit juices. Their requirement for such business includes fruit pulp, preservatives, natural color and sugar. Annual requirement for fruit pulp is 1000 kg and for preservatives is 20 kg. Semi-annual requirement for natural color is 10 kg and monthly requirement of sugar is 50 kg. Carrying cost for all items is 8%. Buying cost per order for fruit pulp, preservatives, natural color and sugar is RO 10, RO 5, RO 3 and RO 1 respectively. Per unit cost for fruit pulp, preservatives, natural color and sugar is RO 1, RO 1.5, RO 1.2 and RO 0.2 respectively. For preservative, the Seller offers to give 10 % discount on unit price if quantity ordered is 50. What will be the ordering cost if seller option is considered a. 1 b. 5 c. 8 d.

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.