Manage Budget and Forecast Assignment Help

Manage Budget Forecast

Manage Budget Forecast must submit assessments by due dates; otherwise, they will incur a fine of $50.00.per Unit (if submitted within one week after the due date) followed by $100.00 per Unit (if submitted within two weeks after the due date) and $150.00 per Unit (if submitted within one month after the due date). If you don’t submit assessments even by one month, or do not pay fines, HIBT may report to DIBP as against non-completion of assessments and non-payment of fees and fines, and it may affect your student visa.

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ASSESSMENT SUMMARY / COVER SHEET 
This form is to be completed by the assessor and used as a final record of student competency.

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Student results are not to be entered onto the Student Database unless all relevant paperwork is completed and attached to this form.

 

Unit Code:FNSACC503
Unit Title:Manage budget and forecast

 

Please attach the following documentation to this formResult

S = Satisfactory

NS = Not Satisfactory

NA = Not Assessed

Assessment 1qWritten AssessmentS  |  NS  |  NA
Assessment 2qCase StudyS  |  NS  |  NA
Assessment 3qProjectS  |  NS  |  NA
Assessment 4qOnline AssessmentS  |  NS  |  NA

Manage Budget Forecast

Final Assessment Result for this unitC  /  NYC
ASSESSMENT 1 – WRITTEN ASSESSMENT

1.1 Define budgets. Define and differentiate cash, revenue and expenditure items by providing an example of each category and which budget it is relevant to when preparing.(PC 1.1)

1.2 Define the following:

–           Fixed and flexible budget

–           Fixed cost and variable cost

–           Breakeven point

–           Types of budgets

1.3Manage Budget Forecast How is the budget process affected by revenue forecasting and what are the limitations in the revenue forecasting technique and how can the same be countered? (PC 3.4)

1.4 Explain the role and function of budgets in helping an organisation reach its objectives.(PC 1.2)

1.5 List five controls that could be used to monitor an organisation’s budget, also briefly explain the importance of variance analysis.(PC 3.3)

1.6 List the steps associated with preparing and documenting the budget process and forecasting estimates. (PC 4.2)

1.7 Explain why stakeholders should be included in the discussion and negotiations of the budget. List stakeholders that have a stake in the outcome of the budget. (PC 1.3)

1.8 What are budget performance indicators? In addition, explain the role of performance indicators in managing budgets and how are expenditure milestones set up? (PC 1.4)

1.9 What are the reasons why Cash Flow Risk may occur? How can Cash Flow Risk be reduced? (PC 2.4)

1.10 In your meeting with your CEO, he has asked you for your input in establishing budget timelines. How could you use the concept of budget calendar in describing reporting timelines and respond back to the CEO? (PC 3.2)

1.11 Auditing of the budget process in any organisation is of great importance which needs to be conducted every two to three years. What does the budget audit examine and detect and the necessary corrective action that needs to be considered.(PC 4.2)

ASSESSMENT 2 –CASE STUDY

Answer the following questions:

Q1 – Read the case study and prepare budget using the information:

Revenue,

Operating expenses,

Integrated income statement,

Cash budget, for the quarter ending 30 June 2015,

Ensure that your budget is presented in table, graph or other forms that enables understanding and clarity.    

YOUare the “chairperson” of the budget committee of Dominic’s Inc. Management want to have a quarterly budget to ensure sales operating expenses are well planned implemented and monitored and controlled to achieve improved operating outcome than was done last quarter. As such the budget lines for sales cogs and operating expense have been provided to you as a guide for the next quarter budgets.

  1. A) Dominic’s Inc Co. sells three products, A, B and C. Sales results for March 2015 was:
ProductUnits SoldSales price Per unitSales Value

$

 A6,000636,000
B12,00010120,000
C15,000460,000
È Additional information
Sales quantities (units) are expected to be the same in April and May and will increase by 10% in June. Sales prices are forecast to increase to $8 (Product A), $12 (Product B) and $5 (Product C) as from June.

B)Dominic’s Inc also had the following operating expenses for the three months ended 31 March 2015.

ITEM Amount ($)
Accounting Fees800
Advertising2,400
Bank charges620
Depreciation3,500
Electricity2,320
Insurances6,818
Interest Paid6,210
Rent24,000
Stationery2,060
Sundries1,264
Superannuation (office staff)5,462
Telephone4,262
Wages (office staff)60,680
Total operating expenses $120,396

 

ÈAdditional information:
Advertising costs are expected to increase by $1,000 next three months.
Depreciation charges are the same every quarter.
Insurances will rise by $500 next three months.
Interest paid is the same each quarter.
Annual Rent will increase by 3% for the quarter
Superannuation is 9% of wages
Wages paid are expected to increase by 4% each quarter.
All other operating expenses are expected to increase by 4% each quarter.

) In the last quarter the business became financially strapped. It lacked enough cash to meet its recurrent financial obligation. This had to be avoided to ensure continuity of the business and competitiveness in the market place.

Dominic’s Inc. also provided you with actual sales for January and February and forecasted sales for March, April, May and June as follows:

 JANFEB
Actual:$192,000$218,000
Forecast:

 Based on company experience, it is estimated that 35 percent of a month’s sales are collected in the month of sale, 48, percent in the month following the sale, and 16 percent in the second month following the sale

  • q Templates:

Sales Budget

ProductUnits SoldSales price Per unitSales Value

$

April   
Product A
Product B
Product C
May   
Product A
Product B
Product C
June   
Product A
Product B
Product C
TOTAL 

Operating Expenses Budget

/for the three months ending 30 June 2015/

Marketing $
Advertising
Administration
Accounting Fees
Depreciation
Electricity
Insurances
Interest Paid
Rent
Stationery
Sundries
Superannuation (office staff)
Telephone
Wages (office staff)
Financial expenses
Bank charges
Total operating expenses

 Budgeted income statement

/for the three months ending 30 June 2015 

Revenue
Sales
Less
Operating expenses
Marketing
Advertising
Administration
Accounting Fees
Depreciation
Electricity
Insurances
Interest Paid
Rent
Stationery
Sundries
Superannuation (office staff)
Telephone
Wages (office staff)
Financial expenses
Bank charges
Total operating expenses
Net profit

Calculate the estimated cash collections for April, May, and June: 

Collection PolicyAprilMayJune
  35% current months sales
48% prior month’s sales
16% second prior month’s sales
Total cash collection   

 In the course of setting up the budget who will be the stakeholders that you will need to consult on one hand and communicate the forecast outcome regarding the budget?

Q2As part of a practical test at an interview for the position of an accounts assistant, the accountant gave you the below budgeted statement of financial performance and asked you to consider the budget versus actual figures given for the end of the first quarter for Take Fast Ltd and complete the table with the variance amount, percentage of budget variance to actual and if the variance is favorable or unfavorable and answer the below mentioned questions.

                                                      Take Fast Ltd

Budgeted statement of financial performance

March 20xx budget v actual

 BUDGETACTUALVARIANCE AMOUNTVARIANCE %VARIANCE

F/UF

Sale: credit (30 days)$20,000.00$47,500.00
Sale: cash$18,000.00$16,800.00
Total$38,000.00$64,300.00
Cost of goods sold$10,000.00$9,000.00
Wages$8,000.00$13,000.00
Electricity$3,000.00$3,000.00
Rent$7,500.00$7,500.00
Total$28,000.00$32,500.00
Sales contribution$10,000$31,800.00   
      
  1. From the figures shown, what type of business is it and what line/lines affect your answer?
  2. Based on the figures, what are the main aims of the business?
  3. If you were the manager with what would you be concerned about?
  4. What recommendations would you make to the client

Q3 By using the breakeven formula listed below calculate the number of units needed to break even.

Sales = Variable expenses + Fixed expenses + Profit

Contribution Income Statement

For the year ended 30 June 2015

 TotalPer unit
Sales$500,000$200
Less variable expense$300,000$120
Contribution Margin200,000
Less fixed expenses$150,000
Net Income$50,000 

 

Q4)Maan Snack Bar wishes to prepare a cash budget for July, August and September. Your job as the manager is to prepare this budget and the accompanying analysis and action plan for the owners.
1) Complete the cash budget below using the information following.
2) Analyse the two questions relating to Maan Snack Bar’s cash position.
3) Prepare an action plan for the upcoming year
Information provided to complete the cash budget. Use only whole dollars.
The closing balance for June is $10,500.
Cash sales:

 

July – $11,000

Aug – $11,500

Sep – $12,000

Credit sales:

 

July – $14,000

Aug – $13,500

Sep – $ 15,300

Cash receipts from accounts are 80% of the credit sales in the month.
Other income is from merchandise and is 2.5% of September cash and credit sales only.
Cash payments are made every month and are 27% of cash sales.
Payments to creditors are made every month and are 13% of total cash receipts.
Salaries and wages are paid every month and are $9,335.
Interest payments are made every month and are $1,177.
Operating expenses are paid, $1,223 for July, $1223 for August and $1,322 for September. Loan repayments are made every month and are $3,335.

Manage Budget Forecast

 

 

 

 

Maan Snack Bar

 

Cash Budget for the months July, August, and September

 

JulyAugSep
Opening bank balance
Receipts
Cash Sales
Cash receipts from accounts
Other
Total Receipts
Cash Available
Payments
Payments to creditors
Salaries and Wages
Interest payments
Operating Expenses
Loan Repayments
Total Payments
Q5)You are given the following information for Maan trading research service for the coming financial year 2016
Expected fees$450,000
Marketing expense:
Fixed Advertising$7,800 per annum
Advertising4 % of Expected fees
Financial expense:
Interest paid$2,400 per month
Bank charges$300 per month
Administration expense:
Accounting staff cost$9,000 per month
Stationary$380 per month
Depreciation of office equipment$9,500 per year
Depreciation of motor vehicles$14,400 per year
Rent$3,000 per month
Travelling expense$30,000 per year
Work cover4% of total salaries
Superannuation9.5% of total salaries
Telecommunication$2,000 per month

  1. Required: Prepare annual budgeted expense for coming year 2016.
  2. How the expenditure milestones are set up?
  3. Discuss what type of verifiable data and sources can provide information to prepare budgets and forecasts.

Q6)Using the results provided below in regard to the production for Coffee tables 2 and the other information. You are required to compute the direct labour budget for the coffee tables using the following information.

Direct labour hours per coffee table1.5 hours
Cost per labour hour$25

 

Item Qtr1 Qtr2 Qtr3 Qtr4 Total
Production units350042002700610016500
Direct labour hours per unit
Total direct labour hours
Direct labour cost per hour
Total direct labour cost

Q7)As part of a practical test at an interview for the position of an accounts assistant, the accountant gave you the below budgeted statement of financial performance and asked you to consider the budget versus actual figures given for the end of the first quarter for Take Fast Ltd and complete the table with the variance amount, percentage of budget variance to actual and if the variance is favorable or unfavorable and answer the below mentioned questions. 

                                                                       Take Fast Ltd

Budgeted statement of financial performance

March 20xx budget v actual

 BUDGETACTUALVARIANCE AMOUNTVARIANCE %VARIANCE

F/UF

Sale: credit (30 days)$20,000.00$47,500.00
Sale: cash$18,000.00$16,800.00
Total$38,000.00$64,300.00
Cost of goods sold$10,000.00$9,000.00
Wages$8,000.00$13,000.00
Electricity$3,000.00$3,000.00
Rent$7,500.00$7,500.00
Total$28,000.00$32,500.00
Sales contribution$10,000$31,800.00   
      
  1. From the figures shown, what type of business is it and what line/lines affect your answer?
  2. Based on the figures, what are the main aims of the business?
  3. If you were the manager with what would you be concerned about?
  4. What recommendations would you make to the client?
ASSESSMENT 3 – PROJECT

You have been asked by the owner of a consultant firm called Quick Growth to prepare the master budget. This consultancy firm consists of the owner whose charges per hour are $68 and his junior staff who are charged out at $42 per hour. The owner has advised you that the below hours are forecast for each quarter.

The consultancy has a credit system for payments with 60% of payment received the quarter in which they are earned and the remaining 40% earned the following month. The opening accounts receivable is $13,200 inclusive of GST. The GST is accounted for on an accrual basis.

 A)Prepare quarterly revenue receipts forecast and cash collections forecast for the next financial year.

HoursJul – SepOct – DecJan – MarApr – Jun
Senior250230230230
Junior210220210220

Revenue Receipts Forecasts 30-June

QtrHoursReceivables
JuniorSeniorTotalJunior @ 42/hrSenior @ 68/hrTotalGSTTotal

/GST inc/

Sept
Dec
Mar
Jun
Total

Cash Collection Forecasts 30-June

QtrReceivablesJul – SepOct – DecJan – MarApr – Jun
Opening
September
December
March
June
Closing

B)The owner will purchase a new vehicle in the Sept qtr for $27,500. In Dec they will purchase photocopiers for $5,500 and a computer system for $5,500 with an upgrade in March for a further $2,750. Each item is inclusive of GST. Prepare the capital expense budget for the financial year.

QtrJul – SepOct – DecJan – MarApr – JunTotal GST
Car
Photocopier
Computer
Total (net GST)
GST
  1. C) All information in the below table is based on source documentation from the companies previous operations. GST expensed are shown:
 July – SepOct – DecJan – MarApr – June
Motor vehicle1,3001,495300450
Printing2005020050
Electricity600555500500
Rent4,5004,5004,5004,500

Depreciation is $700 per qtr and the tax payable at 30% of net profit per qtr. Wages for the senior staff are $8,000 per qtr and junior $5,000.

Complete the expense budget, budgeted statement of financial performance; you will need to add the non GST items to the expense budget, and the cash flow budget which has an opening cash balance of $42,000. The opening GST liability is $2000 and the opening PAYG tax instalment is $2,500.

Expense Budget 30-June

 Jul – SepOct – DecJan – MarApr – Jun
CashExpenses:
Motor Vehicle
Printing
Electricity
Rent
Subtotal GST Inc
GST
Net of GST
Wages Senior
Wages Junior
Subtotal cash items
Depreciation
TOTAL 

Budget Statement of Financial Performance 30-June

 Jul – SepOct – DecJan – MarApr – JunLiability
Service Revenue
Less Expenses
Sub Total
Income Tax 30%
Net Profit

GST Budget – 30-June

 Jul – SepOct – DecJan – MarApr – JunLiability
GST collected on sales
GST paid on exp
GST paid on capital acquisitions
Net GST

Budget Statement of Cash Flows 30-June

Jul – SepOct – DecJan – MarApr – Jun
Opening cash
Add collections from revenues
Total cash available
Less estimated cash payments
Cash payments in expense budget
Capital expenditures
GST payments
Tax payments
Total
Closing cash balance

 D) Use the cashflow budget to prepare a graph of quarterly revenue received, payments made and closing cash positions.

 E) Explain the graph created in question 4 by answering the below questions:

  1. Which month has the highest payments and what has caused this.
  2. What advice would you give with regards to the purchase of capital items?
  3. Approximately what effect would not purchasing the capital items have
  4. Which month has the highest revenue received?
  5. Describe the position of closing cash throughout the year. The owner realizes that there will be significant expenses in this first year of operation. Identify in which quarter the milestones of revenues exceeding expenditures occur. What effect does this have on cash?
  6. What advice would you give about the paying of a $1000 bonus to the junior staff in June promised in the Sep qtr. Based on the staff’s performance and the financial performance of the business for the year? 

F)Suppose that Quick Growth has non-current assets valued at $55,000 with accumulative depreciation at the beginning of the year of $20,000. Use the depreciation expense for the forecast year and other relevant items to complete the budgeted statement of financial position as at 30th June. Assume no depreciation on new non-current assets and all equity is represented by retained profits. 

Budgeted statement of financial POSITION 30-June

Cash at Bank
Accounts receivable
Total current assets
Noncurrent assets
Less depreciation
Car
Computer systems
Photocopier
Total assets
Liabilities
GST
Tax
Total liabilities
Net assets
Owners’ equity
Retained profits

G)What makes setting budget account assumptions time consuming for Quick Growth and what must it consider? Discuss.

ASSESSMENT 4: Online Assessment

Please read the assessment requirements below.

Online Assessment Quiz

You will be able to access this online for this unit, you need to talk to your facilitator/teacher on how to access this resource.

This assessment is due on

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