Budget Planning Assignment Help

Budget Planning Assignment Help

Budget Planning Assignment Help

Part A

Q1 a. Define and differentiate cash, revenue and expenditure items by providing an example of each category and which budget it is relevant to when preparing.

Cash

Revenue

Expenditure

It is defined as the physical form of currency is termed as money such as banknotes and coins.

It is defined as income earned by business with the help of its normal business activities such as sales and many more.

It is defined as payment made in cash or cash equivalent against the purchase of goods and services and it can be evidenced by invoice, receipts or any other documented proof.

Cash can be generated with the help of cash sales or income received in cash only.

Revenue is the earned formed of income. It is not necessary that earned revenue is received by the organisation.

Expenditure is the spending of the organisation against any purchase or any debts. It is not necessary that every spending is made into cash only.

For evaluating cash balance cash flow statement is prepared.

For evaluating revenues Income statement.

For evaluating expenditure Income statement.

High cash balance shows high liquidity of the organisation. Low cash balance shows poor liquidity of the organisation.

High share of revenues helps in getting adequate level of profits. And low share of revenues results into losses.

High share of expenditure results into losses whereas low expenses help in getting profits.

(Clowes, et. al., 2011)

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b. Having implemented controls in ABC Co. on the printing, postage and stationery account, significant changes were noted by you resulting in monthly savings of $300. Use the first two columns to complete the worksheet.

ABC Co. Budget variance Worksheet 30.6.2015

Month

Existing Estimate

Change to

Income (Saving)

Effect on: Expense

Cash flow

July

700

400

300

57%

100

Aug

750

450

300

56%

150

Sept

800

500

300

62.5%

200

Oct

900

600

300

66.67%

300

Nov

950

650

300

68.42%

350

Dec

800

500

300

62.5%

200

Jan

800

500

300

62.5%

200

Feb

800

500

300

62.5%

200

Mar

800

500

300

62.5%

200

Apr

800

500

300

62.5%

200

May

800

500

300

62.5%

200

June

800

500

300

62.5%

200

Total

9,700

6,100

3,600

37.11%

2,500

(Clowes, et. al., 2011)

Q2 a. How is the budget process affected by revenue forecasting? What are the limitations in the revenue forecasting technique and how the same can be countered?

Revenue forecasting is made for the purpose of evaluating the current and future fiscal conditions. With the help of revenue forecasting they forecast the sales and other income and set standards to achieve. The limitations that are available for the revenue forecast are as follows such as: - 

  • Availability of time period:Due to the lack of time period the forecasting is not made effectively as business can’t manage that their full time employee gets engaged into annual forecasting. So it is the overall responsibility of one (Clowes, et. al., 2011).
  • Historical data:It is another effective data that can be utilised in forecasting process. With the use of it adequate level of estimations or forecasts gets made but the problem is historic data is not maintained for a longer period of time.
  • Competitors:Competitors are the effective limitation in forecasting their revenues as it the entry or exit of competitors can’t controlled by them (Clowes, et. al., 2011).

There are various other factors that are considered as the limitations for the revenue budgeting such as change in technology, weather events, implementation of new rules and regulations and many more.
In order to encounter these limitations organisation need to get viewpoint from their employees, have to maintain the historical data and get updated related to their competitors.

b. Assume in a company where you work there are several managers’ sales, production and transport and all of them understand the company’s budget objective. You as the accountant have been given last year’s master budget and told to use all sources of information in formulating objectives and assumptions for the following year’s expense budget. How would you go about attaining information for justifying the following year’s expense budget?

In order to attain the information from the master budget for the purpose of justifying the following year’s expense budget I would like to compare the budgeted results and the actual results. As the variance helps in making effective analysis over the performance and with the use of this information following year’s budget get justified in effective manner (Clowes, et. al., 2011).

Q3. During the school term break you were approached by a finance company to assist in preparing the annual budget for their business. The CEO had been responsible for the previous period’s budget. You have been introduced to the three departmental managers (marketing, production and logistics) by the CEO to assist you with formulating the budget. The marketing manager has given you the sales forecast that he was very confident with.

a. After being introduced by the CEO to the three departmental managers you will need to discuss the budget in a simulated workplace scenario with your Trainer & Assessor who will be playing the role or the three managers (marketing, production and logistics) in order to assist you in the formulation of the budget. You will need to ask the necessary questions in order to elicit responses and seek clarification. All recommendations received from the Trainer & Assessor should be well documented so they can assist in the sales forecasts. You will also provide advice on the required financial information that needs to be included in the budget.

The set of questions that get asked from the managers are:

  • Did variance analysis is utilised while preparing this master budget?
  • Did last year’s budget is utilised for extracting set of information?
  • Did effective analysis made over the available information?
  • Adequate level of comparison is made among the overall performance?
  • Which statements get utilised for the purpose of preparing budgets?

The financial information that needed to be included in the budget is necessary because it helps in making effective forecasting and estimations related to the budget and also helps in setting effective objectives (Rundio & Sigma 2014).

b. Besides the three departmental managers, who else would you communicate with in order to set the sales forecast and how would you document the process? How would you use the sales budget in order to draw out the other budgets?

Besides three departmental managers there are few more managers such as sales manager, accountant and suppliers with communication is made for the purpose of sales forecast. 
There are various budgets that get prepared with the use of sales budgets are as follows such as production budget, purchase budget and revenue budget. These budgets get prepared with the use of sales budget in an effective manner (Rundio & Sigma 2014).

c. What are the five steps for building the master budget?

Process of building master budget is as follows:
Step 1: - Add up all fixed budget costs. It makes inclusion of advertising, salaries, benefits, contribution and supplies.
Step 2: - Add up all variable costs. Items get included under it are factory overhead, production costs and material costs (Rundio & Sigma 2014).
Step 3: Make calculation of cushion for excesses.
Step 4: Add all these available figures
Step 5: Deduct any component if necessary.

d. When conducting budget meetings on discussion of budgets between managers and the CEO, who is responsible and what standard for negotiation should be set.

The responsible authority is the one who prepare the budget as he (accountant) is the only one who knows the all the positive and negative inputs & output of the prepared budget. Accountant attained detailed information as he makes effective research and analysis over the available information to prepare the budget report. In order to negotiate there are effective standards are set and according to this they need to provide adequate level of information for making negotiations (Rundio & Sigma 2014).

Q4 a. As most organisations have a sales forecast spreadsheet in place, how could the same be used to show which period profit milestones occurred and how management could motivate staff to meet profit sales milestones?

In order to showcase the period of profit milestones they make use of the breakeven point. It is such point where they face no profit – no loss situation. Once they attain the BEP then it is realised that they recover their invested amount and after that they earn adequate level of profits. In order to motivate the employees to meet profit sales milestones they need to provide then non-monetary bonuses as well as profitability based bonuses or sales share bonus or mission bonus. By providing effective bonuses to the employees they make their employees motivated in order to attain the profit sales milestones (Hughes & Kirby, 2014).

b. How are the expenditure milestones set up in an organisation?

The expenditure milestones are set up with the use of the previous year’s expenditure performance. Variance between the last year’s budgeted expenditure and the actual expenditure helps in getting adequate level of information. This information further get utilised for the purpose of setting up expenditure milestones in an organisation (Redburn, et. al., 2015).

c. By using the breakeven formula listed below, calculate the number of units needed to break even.

ABC Ltd Contribution Income Statement For the year ended 30 June 2015

Particulars

Total

Per unit

Sales

$500,000

$200

Less: variable expense

$300,000

$120

Contribution margin

$200,000

$80

Less: fixed expenses

$150,000

 

Net income

$50,000

 

Break-even point = fixed expense / contribution per unit
Fixed expense = $150,000
Contribution per unit = unit per cost – per unit variable expense
= $200 - $120
Contribution per unit= $80
BEP = $150,000 / 80
BEP= 1,875 units (Redburn, et. al., 2015)

Q5 a. Discuss the following: In all organisations, the bank account needs to be reconciled. What does reconciling the bank account reveal in regards to the cash flow budget? Which budgeted statement is the bank account reconciled to?

Bank reconciliation process is a necessary process as it helps in identifying the potential errors, fraud or irregularities and helps the organisational management to make proper adjustments in their cash flow statement. Bank reconciliation statement provides external record in context to the company’s cash flows. With the help of bank reconciliation statement management compare their cash flow statement in order to evaluate its accuracy and authenticity. With the help of it the budgeted statement that gets reconciled with bank account is cash budget as it gets prepared for the purpose of preparing policies related to the cash control and monitoring. Bank reconciliation become an important element as it add value to the organisational cash control policies and with the help of it management verify the cash inflows and outflows with the available external source of cash flows (Libby & Lindsay, 2010).

b. Create a projected revenue budget from Jan 2016-Jun 2016

ABC Ltd. Revenue Forecasts

1st Jan 2016- 30th June 2016

Particulars

Nov

Dec

Jan

Feb

March

Apr

May

June

Cash

3,000

5,000

7,000

5,000

5,000

4,500

3,000

3,000

Total credit

6,000

10,000

14,000

10,000

10,000

9,000

6,000

6,000

Credit received

3,000

7,100

11,400

11,400

10,600

9,500

7,650

6,450

Total $

6,000

12,100

18,400

16,400

15,600

14,000

10,650

9,450

(Libby & Lindsay, 2010)

c. How do departments within an organisation compete for allocated funding for their projects? What role does the budgeted statement of financial performance play?

The departments within an organisation compete in various ways for allocated funding for their projects such as:

  • They prepare their budgets accordingly for the proper and effective utilisation of the allotted finance (Graham, 2015).
  • They made financial planning to utilise the funds in effective manner. 
  • They implement the plans in effective manner to make optimum utilisation of the allotted funds.

There are effective roles are played by the budgeted statement of financial performance such as:

  • It helps in planning future expenditures
  • It helps in tracking spending variances
  • It provides effective information related to the performance.
  • It helps in making effective level of improvements in their performance and utilisation of the financial resources (Graham, 2015).

Q6 a. Part of your responsibility is controlling cost in your new position. The CEO is trying to manage the level of increased motor vehicle costs, which is putting pressure on the business operations. You have completed the following year’s master budget, including motor vehicle expenses. Included in your notes will be suggested management controls would you suggest that will accompany the master budget. This needs to be sent to the CEO for approval.

As there is increase in the motor vehicle expenses it is required to inspect the evidences provided in context to the expenses made related to the motor vehicle. Secondly, it becomes necessary to evaluate the condition of motor vehicle as it becomes old and get over utilised. If these elements are the results than it is proposed to sold it out or replace it with the new motor vehicle. By replacing it with new motor vehicle helps in reducing the unnecessary expenditure made over its maintenance. If some fraudulent activities are found from the side of the users such as fraudulent maintenance bills and others strict action should be taken against the user. It must become an example for others so that none of them can’t so this again in future (Kumar, 2014).

b. In your meeting with the CEO, he asked you for your input in establishing budget timelines. How could you use the concept of a budget calendar in describing reporting timelines when meeting with the CEO?

The concept of a budget calendar is easy and simple to use as it helps in setting effective timelines for setting meetings. With the use of this software all the transactions are recorded in such a manner so that every-one can understand easily and perform their activities accordingly (Baker & English, 2013).

Q7 a. In the long term, which specific two budgets are the most relevant to the governing board and for what reason?

Research and development budget and Capital expenditure budgets are two long term budgets.
Research and development budget is such budget that gets prepared for the purpose of investing activities in order to make adequate level of improvements in their existing products and services or make adequate level of development in their products and services. With the help of research and development they made effective level of development. It is different from regular activities and necessarily required for developing their products and services as development require huge research. With the help of it governing bodies monitoring the research and development activities and put corrective actions if something is missing or going wrong way (Cheong, et. al., 2013).

Capital expenditure budget:It is such budget that gets prepared for the purpose of identifying the amount of cash that need to be invested by the organisation in their projects or investment or long term assets. With the help of it they identify the requirement of the capital amount and also get approval of that amount during the budget preparation. These budgets mainly get prepared for the purpose of making investment or purchasing long term assets. With the help of it they make arrangements of required capital well on time from adequate financial sources. Governing bodies utilise this budget for the purpose of evaluating the various sources, profitability of the investment or long term assets. With the use of it they evaluate the available investment option or available projects or long term assets (Cheong, et. al., 2013).

b. One of the governance board members is constantly asking the accountant questions about motor vehicle expenses that are constantly over budget. He blames one of the business managers who he dislikes and points to the fact that the manager has unnecessary sports pack on his car. What type of budget does the motor vehicle expense belong to and who is responsible for this budget. What steps would you take if you were the accountant?

The motor vehicle expense is related to the cash budget as all the expenses made in cash such as petrol, maintenance and other related expenses. Accountant is responsible for the activities related to the cash budget and need to collect all the evidences (Willoughby, 2014).
There are few steps should be taken in context to it such as: - 

  • First of all I would check the expenses made and the budgeted expenses.
  • Secondly I will check the evidences present by the managers related to the motor vehicle expenses.
  • Thirdly cross check the evidences presented (Willoughby, 2014).
  • Fourthly disapprove the unnecessary expenses made by the manager if any.
  • Lastly, if all the expenses are correct then prepare a effective report over it and present in front of the governance board members (Willoughby, 2014).

c. Auditing of the budget process in any organisation is of great importance and needs to be conducted every two to three years. What does the budget audit examine and detect? What necessary corrective action that needs to be considered?

Budget audit is made in order to determine the level of financial planning, budgeting and forecasting processes and structures that are adequate and effective in order to direct their resources where they needed the most. Budget audit examine various things such as:

  • Whether activities or schedules or resources get integrated into budget or not in order to attain their objectives.
  • Whether the budgets get developed well on time along with adequate level of detail.
  • It helps in monitoring the forecasting on a regular basis.
  • Whether the proper allocation of resources is made or not (Willoughby, 2014).

With the help of the audit of budget there are few factors that get detected such as fraud or waste. These are two most important factors that get detected with the help of budget audit. Sometimes unnecessary expenses are included in budget in order to hide some balances or safeguard some fraudulent activities or anything else which is unethical as per the business prospective (Bernstein, 2015).

The corrective actions that need to be considered are as follows such as: - 

  • Analysis of root cause:It is necessary to analyse the root cause as it helps in getting the effective reasons behind the errors. It helps in taking effective corrective actions to correct the errors (Bernstein, 2015).
  • Immediate containment actions: -With the help of the immediate containment actions the risk can be lower down. Actions make inclusion of communication with management, inspection of the activities and inspect the accountable person (Bernstein, 2015).

Part B

1 (information provided is incomplete)

2. Using formulae and functions (NB: Formulae is the plural for formula, formulas is also correct)

Staff Name

Total Hrs

Hrly. Rate

Gross Pay

Tax 33%

Net Pay

Total gross pay per staff

Jan Smith

40

$30.00

$1,200.00

$396.00

$804.00

$1,200.00

Pete Black

40

$32.00

$1,280.00

$422.40

$857.60

$1,280.00

Alison Jones

20

$12.00

$240.00

$79.20

$160.80

$240.00

Andrew Heaps

40

$20.00

$800.00

$264.00

$536.00

$800.00

Tom Jacks

10

$30.00

$300.00

$99.00

$201.00

$300.00

Zac Spiteri

40

$18.00

$720.00

$237.60

$482.40

$720.00

Total

 

 

$4,540.00

1498.2

3041.8

$4,540.00

(Pan, et. al., 2015)

No. of employees

6

No. of net pays

6

Average Net pay

$757.00

Highest net pay

$1,280

Lowest Net pay

$240.00

Standard deviation

435.691022

(Pan, et. al., 2015)

3. Recording and using macros.   

 

Q1

Q2

Q3

Q4

TOTAL

ACT

15005

13568

11684

17985

58242

NSW

55896

67065

60235

59648

242844

NT

7890

3564

5540

8403

25397

QLD

32088

28981

33457

30047

124573

SA

20415

18465

19846

17652

76378

TAS

18035

22350

21984

21987

84356

VIC

48985

55657

54687

56421

215750

WA

30156

30003

27982

29856

117997

TOTAL:

228470

239653

235415

241999

945537

(Chen, et. al., 2016)

4. Using spreadsheets

  Agency

Address

  Type

Bedrooms

Toilets

Bennison

6/1421 High St

unit

2

1

HS Hawthorn

20 Darling Av

house

4

1

Jellies’ Craig

6/3 St Johns Av

unit

1

1

Jellies’ Craig

1/488 Camberwell Rd

unit

2

1

Jellies’ Craig

1/1017 Toorak Rd

townhouse

3

1

Jellies’ Craig

9a Royton St

house

4

3

Jellies’ Craig

1/488 Camberwell Rd

house

2

1

Marshall White

6/6 Karana Pl

unit

2

1

Noel Jones Balwyn

1 Kirkwood Dr

house

4

2

Noel Jones Balwyn

1 Kirkwood Dr

house

4

2

Noel Jones Balwyn

1 Kirkwood Dr

house

4

2

RW Balwyn/Kew

18 Aisbett Av

unit

2

1

RW Balwyn/Kew

18 Aisbett Av

house

2

1

Woodard’s Hawthorn

59 Coolangatta Rd

house

3

1

(Jaska, 2014)

5. Represent Numerical Data in Graphic Form

Animal Kingdom Pets and Supplies

Manager List and Store Sales of Live-Stock

Name

Manager

Mobile

Live-Stock Sales

Store Commission Earned

Other sales

Chadstone

Stacey

0469456789

$1,590.00

$190.00

$3,457.37

Highpoint

Barry

0423879654

$2,876.50

$143.83

$4,657.25

Southland

Steve

0452564789

$1,500.00

$630.50

$3,790.49

Werribee

Ben

0455123456

$515.00

$170.00

$5,437.87

Greensborou

Helen

0499879123

$674.00

$315.00

$4,678.78

 

 

Total

$7,155.50

$1,449.33

$22,021.76

(Palmer, 2014)

Name

Live-Stock Sales

Chadstone

$1,590.00

Highpoint

$2,876.50

Southland

$1,500.00

Werribee

$515.00

Greensborou

$674.00

Numerical Data in Graphic Form

 (Flor & Grell, 2013)

6. Being employed in an organisation as an IT manager you noted that certain aspects of ergonomics needed to be considered by management for all employees during the use of computers.

List five potential health and safety hazards that could occur and five ways in which you can improve the overall layout of your area to increase efficiency and decrease hazards.

The five potential health and safety hazards that could occur and ways in which these get improved in order to decrease hazard and increase the level of efficiency such as: -

Risk Factor

Tips to reduce risks

Repetition

  • Tasks need to be performed alternatively.
  • It is necessary to take regular breaks from keying/mousing.

Awkward Position

  • Need to sit supported against the back of chair.
  • Avoid twist and bend of neck or trunk
  • Keep shoulders relaxed.
  • Keep arms close to your sides while working.
  •  While using keyboard and mouse keep the elbows at a angle of 100-110.
  • Put the wrist in straight position while using keyboard or mouse.
  • Keep the fingers in relaxed position while keying and mousing.
  • Use headphones during frequent or prolonged phone call.
  • It is necessary to make frequent change in positions.

Force/Pressure

  • Use key with light touch
  • Need to avoid the prolonged or excessive use of mouse.
  • Make use of electrical stapler for large jobs.

Environmental

  • Reduce glare of your computer screen by adjusting its tilts and placements.
  • Make use of glare guards and light filters.

Visualise

  • Took visual breaks
  • Need to blink often while viewing the monitor.

(Cottrell, 2014)

7. The Sales invoice. Use the template below or create your own invoice with all details for purchased products. You can sell any product at any price, but you must include GST (10%), discount amounts and at least four items in your invoice. Do all formulae required. Format, print preview and submit your assessment in printable format.

Sales invoice: - 

Item

Quantity

List Price

Discount

Your Price

Total

Mobile covers

1000

$9

$1

$10

$10,000

Bluetooth

100

$90

$10

$100

$10,000

Battery

200

$72

$8

$80

$16,000

Headphones

200

$63

$7

$70

$14,000

Subtotal

1500

$234

$26

$260

$390,000

GST

10%

10%

10%

10%

10%

 

150

23.4

2.6

26

3,900

Amount Due

1,350

210.6

23.4

234

386,100

 

 

 

 

 

 

(Cottrell, 2014)

8. Using FX functions. You see an ad for a used car that you would like to buy. The ad says that the dealer will give anyone a $500 trade in on his or her old vehicle. The asking price for the car (before trade-in) is $8,000. They will offer you a 4% interest rate for a 3-year loan. What is the amount you need to finance? Use the PMT function to determine what your monthly payments will be. Copy the work, and then use the Goal Seek tool to determine what the asking price of the car, before trade-in, would have to be to make a monthly payment of $200. Show both scenarios in your worksheet.

Please automate where possible and format, print preview and submit your assessment in printable form.

Particulars

1st option

2nd option

Loan Amount

8000

8000

Down Payment

0

1885.44

Interest @ 4%

1085.44

1085.44

Total

9085.44

9085.44

Monthly EMI

252.3733

200

(Beltran-Royo, et. al., 2013)

9. Formulae and formatting. The third annual spring term “Care for Critters” fundraiser was a tremendous success! There were three posts for the event: a table in front of the Commons; a booth at Gengras; and another at Konover. The booth at Konover made $45 from selling t-shirts, $10 from selling stickers, and the donation jar earned $23.75. At Gengras, the t-shirts brought in $75, stickers earned $10 and the donation jar collected an additional $33.95. Commons sold no t-shirts or stickers, but the donation jar netted a cool $19.67. Create a spreadsheet with the appropriate labels, data, formulae and formatting. How much money did each item make? What was the total raised at each location? How much did the full fundraiser actually earn? What percent of the total donation came from each location?

Please automate where possible and format, print preview and submit your assessment in printable form.

Particulars

Gengras

Konover

Commons

Total

T Shirts

45

75

0

120

Stickers

10

10

0

20

Donations

23.75

33.95

19.67

77.37

Total

78.75

118.95

19.67

217.37

Percentage

36.23%

54.72%

9.05%

 

(Lorain, et. al., 2015)

10. Graphs and charts. Create a chart for each (3 pie graphs/charts), please automate where possible and print preview, adjust and submit your assessment in printable format.

There are 28 students in a class. 10 are freshmen, 8 sophomores, 4 juniors, and 1 senior. 5 people did not answer the question. Graph this as a pie chart

Types of student

Number of students

Freshmen

10

Sophomores

8

Juniors

6

Senior

1

Unknown

5

pie chart
(Lipshits, 2015)
There are 11 men and 17 women – do a pie chart for this.

Gender

Numbers

Men

11

Women

17

 pie chart
(Lipshits, 2015)
If only 23 of the students did the homework assignment, what percent of the class is that? Create another pie chart.

Particulars

Number

Homework done

23

Not done

5

 home work pie chart 
(Lipshits, 2015)

References

  • Baker, H.K. & English, P. 2011;2013;, Capital Budgeting Valuation: Financial Analysis for Today's Investment Projects, 1. Aufl.;1; edn, Wiley, Hoboken.
  • Beltran-Royo, C., Zhang, H., Blanco, L.A. & Almagro, J. 2013, "Multistage multiproduct advertising budgeting",European Journal of Operational Research, vol. 225, no. 1, pp. 179-188.
  • Bernstein, R. 2015, "Grant proposal budgeting 101",Science, .
  • Chen, G., Xu, Y., Hu, X., Guo, X., Ma, J., Hu, Y. & Xie, Y. 2016, "TSocket: Thermal Sustainable Power Budgeting",ACM Transactions on Design Automation of Electronic Systems (TODAES), vol. 21, no. 2, pp. 1-22.
  • Cheong, Y., Kim, K. & Kim, H. 2013, "Advertising and promotion budgeting during volatile economic conditions: Factors influencing the level of decentralization in budgeting and its relations to budget size and allocation", International Journal of Advertising, vol. 32, no. 1, pp. 143.
  • Clowes, R., Scriven, V. & National Institute of Accountants (Australia) 2011, Budgeting: a practical approach, 2nd edn, Pearson Australia, Frenchs Forest, N.S.W.
  • Cottrell, T. 2014, "Transferring and teaching budgeting", The Bottom Line: Managing library finances, vol. 27, no. 1, pp. 6-10.