Australian Ideal College's Budgeting for Increased Sales

Australian Ideal College
Registered as Australian Ideal College Pty Ltd

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Educating for Excellence E: info@aic.edu.au | W: www.aic.edu.au
Assessment Submission Sheet
Course BSB51918 Diploma of Leadership and Management
Unit BSBFIM501 Manage Budgets and Financial Plans
Assessor Name
Student Name
Student ID
Date Due
Please read and sign this assessment coversheet and submit it together with your assessment to
your Assessor by the due date.
Student Declaration
 I declare that the work submitted is my own, and has not been copied or plagiarised from any
person or source.
 I have read the Plagiarism Policy and Assessment Appeal and Reassessment Policy in the
Student Handbook and I understand all the rules and guidelines for undertaking assessments.
 I understand that by typing my full name in the student field this is equivalent to a hand-written
signature.
 I give permission for my assessment material to be used for continuous improvement purposes.
Date
Student Signature
Submitted
Assessor Use Only
Assessment Items Result
Task 1 Case Study S NS
Task 2 Project S NS
Task 3 Assignment S NS
Final Result for this unit C NYC
Assessor Declaration: I declare that I have

Student Declaration: I declare that I have been
conducted a fair, valid, reliable and flexible
assessed in this unit, and I have been advised of
assessment with this student, and I have
my result. I am also aware of my appeal rights.
provided appropriate feedback
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AIC-UP-BSBFIM501-V4.0 Page 1 of 17
Task 1
Assessment Instructions
This is an individual assessment. You are required to demonstrate the ability to plan financial
management approaches. In response to the scenario provided, you are required to answer a series of
questions. You must answer all of the questions below, and include examples where appropriate. Please
ensure that you have answered each question with an appropriate level of detail. If you need help
understanding any questions, ask your assessor to explain.
To be deemed competent you will need to successfully demonstrate the following:

 You must complete and successfully answer all questions.
Question 1
Read the case study, then complete the questions that follow.
Case study
Hasan works for a company that manufactures shower screens. He is the cost centre manager for the
production area. For the four products they manufacture, sales at the end of February are in the table
below.
Product Unit Value ($)
Basic 150 37,500 (250 per unit)
Standard plus 250 125,000 (500 per unit)
Deluxe 200 150,000 (750 per unit)
Super deluxe 100 100,000 (1000 per unit)
The above production is standard from month to month and the costs involved are below.
Product Labour per unit Material cost per Overhead contribution
(hours) unit ($) per unit ($)
Basic 2.0 100 10
Standard plus 3.0 250 20
Deluxe 4.0 480 34
Super deluxe 5.0 600 43
Labour is costed at $50 per hour and includes contributions to leave entitlements and superannuation.
Material costs are fixed with a supply contract for the standard quantities required each month.
Hasan is advised that the company has just won an extra special order for the supply of shower screens
for a refit of a hotel, and the products are required by the end of March. The quantities and agreed per unit
price are below.
Product Required Unit Price agreed per unit ($)

Basic 30 275
Standard plus 50 550
Deluxe 10 750
Super deluxe 5 900
Production for March will now be the usual monthly production as per February above, plus the new
contract commitment.
(a) Explain in your own words the role of a budget and its relationship with the strategic objectives of an
organisation.
A budget is an estimate of income and expenditures for a definite particular period of time that is
normally collected and re-evaluated on a regular basis. Budgets may be created for an individual, a
group of individuals, a corporation, a government, or just about everything else that generates and
spends money. The budget's role is to take the organisation's agenda and quantify it into something
meaningful to reach for, thus assisting in forecasting potential market conditions and avoiding otherwise
unexpected problems. The strategic plan outlines out the business's course and priorities, as well as
guidance for efforts to accomplish those objectives while the budget looks at the funds required to fulfill
those strategic goals. Budgeting is just one aspect of strategic planning.
(b) Prepare a sales budget for March using the table provided below.
Units Price per unit Value
Usual monthly production

Basic 150 250 0
Standard plus 250 500 0
Deluxe 200 750 0
Super deluxe 100 1000 0
Total monthly production 0 2500 0
Special order
Basic 30 275 8250
Standard plus 50 550 27500
Deluxe 10 750 7500
Super deluxe 5 900 4500
Total special order 95 2475 47750
Total March 795 460250
Type of screen Units

Basic 180
Standard plus 300
Deluxe 210
Super deluxe 105
Total units 795
(c) Determine the total labour required for a standard month’s production and for the additional production
in March. You are advised that the total labour availability is 2,400 hours based on normal working
hours. Since the existing labour force is nearly fully utilised, are there any issues for Hasan? If so,
what options would you investigate and what would you recommend, given that overtime is costed at
$75 per hour?
A standard month's output requires 2,350 hours of labor. A special order necessitates an extra 275 labor
hours. This is 225 hours more than the budgeted number of 2,400 hours, posing a labor shortage
problem for Hasan.
Possible solutions to the labor supply problem include:

1. Hasan could be using overtime to make up the remaining 225 hours. This will result in a $5,625
rise in labor costs. This is much more than 60% of the $8,845 benefit for the special labor.
2. Hasan may hire more casual workers at the same cost as the existing workforce. This can result
in recruiting costs. This can only be pursued if the cost of recruiting is less than $5,625.
3. Hasan may be able to change the delivery schedule for the special order in order to manufacture
more units at normal labor rates in April.
4. Hasan could fulfil the special order specifications by supplying some standard orders from
warehouses inventory.
(d) What other issues Hasan face? List at least three. For each issue, suggest a contingency plan that you
would expect to be in place.
Probable Issue
 No inputs were accessible.
 Extra commodity storage capacity is limited.
 Employee readiness
Contingency Plans
 Investigate input accessibility with the distributor, depleted input inventory levels, and
seek sufficient supplies from an alternative distributor.
 Hire a temporary storage facility.
 Annual vacation and other absenteeism should be scheduled to meet the output
timetable.
(e) Describe the checks that are performed to ensure a budget can be achieved.
Checks that are often done to ensure that a budget is feasible include:
1. Evaluating the abilities of workplace and comparing it to the task needed

2. Developing budgetary risk forecasts and comparing it to available resources.
3. Developing tax forecasts for the budget cycle and relating them to earnings estimates
4. Assessing future threats.
5. Verifying the reliability of all facts in the budget.
6. Consultation with other stakeholders, such as staff executives & administration staff .
Question 2
Read the case study, and complete the questions that follow.
Case study
Hugo is the manager of a medium-sized retailing operation and is concerned about the collection of
monies for goods sold. He has a current policy for collecting monies from credit customers and all goods
are sold on credit. He has actual sales data for the first six months of the financial year and projected
sales figures for the six months to credit customers. He wishes to consider the impact of adjusting the
policy and has two proposals in mind. The policies are below:
Timing of payment Payment under current Projected payment Projected payment

policy under policy option 1 under policy option 2
1st month after sale 60% of monies collected 80% 90%
2nd month after sale 25% of monies collected 12% 5%
3rd month after sale 14% of monies collected 7% 3%
4th month after sale
His sales figures are as follows.
Sales figures
Actual for first six months Predicted for next six months
July $100,000 January $120,000
August $115,000 February $125,000
September $115,000 March $125,000
October $100,000 April $120,000
November $120,000 May $120,000
December $140,000 June $110,000
There is one additional question Hugo wants answered: is there any advantage from a cash flow
perspective of offering a two percent discount if accounts are settled in the first month? His view is that
most of his customers would pay in the first month and the remaining would pay in the next month, and no
bad debts would need to be written off.
(a) Describe a budget development coordination and approval process.

A systematic and organised budgeting mechanism is the bedrock of effective business management,
progress, and development. Practice and preparation can be the cornerstones of a company budgeting
operation, much as they are in the financial affairs. Budgeting, like other aspects of organising an
organisation, must be driven by the mission of what to achieve and the strategic plan & steps to get
there. Comments in response can differ based on the learner's prior knowledge. The following elements
should be included in a budget development and coordination process:
 Upper administration creates the organisation's budget.
 Upper administration cascades out into the organisation to offices.
 Area supervisors determine appropriate goals and consult through organisational experts to
validate that interpretation.
 Area supervisors collaborate with the staff and other partners to determine budget details,
including important success benchmarks for each of the key operations.
 If there are some unattainable budget items, area supervisors discuss with upper management.
 Area supervisors deliver the draft budget, with any approved changes, to upper management in
the suitable framework for authorization.
 Area supervisors collaborate with staff members and share authorized budgets.
 Job strategies are created by team members.
 Area supervisors keep track of how much job schedules and budgets are being followed.
(b) For what reasons might you adjust the format or methods of communication about budgets to
employees?
Please answer Question 2 Part (b) here.
(c) Analyse the optional policies and make a recommendation to Hugo as to which policy he should
consider as the better option. Include in your response a projected cash flow spreadsheet for each of the
proposals.
Please answer Question 2 Part (c) here.
(d) Provide feedback on Hugo’s additional question.

Please answer Question 2 Part (d) here.
Task 2
This is an individual assessment. You are required to demonstrate the ability to monitor and control
finances. In response to the scenario provided, you will create a simple spreadsheet budget to capture
monitoring information. Using information provided to you by your assessor, you will then use the budget
spreadsheet to produce a report on expenditure in accordance with organisational policies and
procedures. You will also modify a contingency plan.
If you need help understanding any questions, ask your assessor to explain.
Procedure
 Read through the scenario provided and Part A and B.
 Design and develop a spreadsheet to capture budgeted and actual figures to produce a
variance report.
 Access actual budget figures from relevant managers and accounting systems (assessor).
 Monitor and record actual figures.
 Produce a variance report as per organisational requirements.
 Consider the scenario information and contingency plan provided and analyse the variance
report.
 Modify the contingency and implementation plans provided in the scenario to improve
effectiveness.
 Submit all documents required in the specifications below to your assessor. Ensure you keep a
copy of all work submitted for your records.

You must provide:
 a budget spreadsheet
 a budget variation report
 a modified contingency plan and modified implementation plan.
Appendix 1 – Big Red Bicycle Pty Ltd scenario

Big Red Bicycle is a bicycle manufacturer based in Bendigo Victoria. The company produces bicycles
which it sells to retailers in the domestic Australian market.
The senior management structure of the company appears below.
Person Position
Michelle Yeo CEO
Tom Copeland Managing Director
John Black CFO
Stuart LaRoux Operations General Manager
Pat Roberts Senior Accountant
Sam Gellar Sales General Manager
Charles Pierce Production Manager
Holly Burke HR Manager
According to company strategic plans, the company aims to achieve a net profit before tax of $1,000,000.
The chief risks to this goal are:
 poor sales due to economic downturn

 increases in expenses such as wage expenses.
In addition to Australian operations, the company is considering manufacturing overseas to take

advantage of reduced costs. The company is also considering diversifying its product range to reduce
exposure to poor sales of one product.
Role
You are the Senior Accountant at Big Red Bicycle. A major component of your role is setting budgets and
monitoring budgetary performance for the organisation.
Part A
The Managing Director, Tom Copeland has asked you to implement a process to monitor expenditure and
income. He has asked you to prepare a spreadsheet to capture and compare actual income and
expenditure to budgeted figures. Your spreadsheet must contain columns for each of the four quarters of
the financial year. You are required to gather data from the relevant managers (your assessor) to
complete a budget variation report.
The report should conform to organisational requirements in policies and procedures

and contain:
 columns to show actual account values
 absolute variation
 percentage variation.
Please answer Part A here.
Part B
It has come to the attention of the managing director, Tom Copeland, that due to the current economic
climate, sales volume may be 20% below target this financial year. Tom is worried that this may severely
impact profit projections. The company can accept as much as a 10% variance in profit projections;
however, more than this could severely affect the company’s ability to pay obligations and invest. Reliable
data to determine whether the risk has eventuated should be available by midway through the second
quarter (Q2), when sales data for the company’s product are in.
Consider the contingency plan and the implementation plan for the contingency below. You have already
implemented a portion of the contingency plan, namely the monitoring of budget performance in the
variation report you have prepared. You should now analyse the report to determine the effectiveness of
the contingency plan and its implementation.
You have received the following feedback from team members:
 full-time workers and sales people resentful of time wasting and distracting contract employees
 overtime not used but employees resentful of suggestion it might not be approved if needed
 training suited the needs of many sales team members but was not relevant to about half
 sales team members were happy with the incentives program and tried hard to make sales in
the third quarter (Q3); however they were also resentful at the threatening tone of emails and
soon lost enthusiasm
 effect of one-day training wearing off
 50 percent of direct wages costs are attributable to short-term contract employees whose
contracts have expired and who are no longer needed
 employees concerned about lack of attention paid to wastage: water; electricity: paper; raw
materials
 employees feel left out of budgetary decision-making in general.
The managing director would like you to submit a revised contingency plan and contingency plan
implementation to bring income and expenses under more effective control.
Please answer Part B here.
Contingency plan for Part B

Contingency Plan
Company name: Big Red Bicycle Pty Ltd
Person developing the plan:
Name : Tom Copeland Position: Managing Director
Risk identified: Profit for FY more than 10% less than budgeted
Strategies/activities to minimise the risk By when By whom

Produce quarterly variation reports to identify income/ expenditure and Q2 PR
profit shortfalls over 10%.
Implement sales training/coaching. Q2 PR
Implement incentives program. Q2 PR
Reduce overtime. Q2 PR
Contingency implementation plan for Part B

Risk identified: Profit for FY more than 10% less than budgeted
Activity Monitoring activity and date Person/s
Monitor variance. Completion of report: Q2. PR
Analysis of report to identify issues. Management report: Q2. PR
Email to warn employees of risk to jobs. Monitoring of variation report PR

results: Q4.
Email to announce rise of commission from 2% to Monitoring of variation report PR

2.5%. results: Q3.
Email to inform employees that overtime will no Monitoring of variation report PR

longer be approved. results: Q3.
Email to inform employees of mandatory sales Monitoring of variation report PR

skills training: set program. results: Q3.
Mandatory training conducted. Monitoring of variation report PR

results: Q3.
Appendix 2 – Budgeting and finance policy
Budget preparations
The business plan will set the key parameters for all financial budgeting.
Variations to the business plan must be approved by the CEO and senior management strategic
committee.
Prior period results are to be analysed to identify the profit level of cost centres, identify correlations
between financial statistics and to set key performance indicators and benchmarks for future budgets.
The budget planning committee will meet prior to budgets being developed and agree on budget
parameters. The committee will consist of all department managers plus the CEO and finance
manager.
 A CAPEX budget will be developed from the approved business plan.
 A detailed sales budget must be completed before completing the profit budget for the year.
 A cash-flow budget covering the first three months will be prepared after the profit budget is
completed.
 A master budget including profit projections will be completed from which cost centre allocations
will be made.
 Budget notes that contain all the assumptions used in the budgets should accompany the master
budget or be made available on a separate document. Where possible, the notes should justify the
basis on which the estimates were made.
 Overheads (non-direct expenses) will be apportioned across the cost centres equally. Exceptions
need to be negotiated with relevant authorities.
 All expenses and income will be spread equally throughout the year unless otherwise required by
business needs or business environment.
 The financial cycle for budgeting purposes will be yearly ending 30 June.
Reporting requirements
Software applications to be used in reporting.
 environment – Windows
 accounting Information System – BRB will use MYOB AccountRight plus
 data analysis – BRB will use Microsoft Excel 2007.
Actual results will be produced monthly by the MYOB accounting system. Actual variances to budget will
be performed by Excel with a report prepared for senior management for significant variances.
Financial delegations
 Each manager is responsible for achieving the revenue budgets agreed to in the budget committee.
 Each manager is responsible to approve, by signing the necessary paperwork, all expenditures that
fall within their area of responsibility.
 Expenditures must be within the budget guidelines for the individual departments.
Format for budgets and reports

All budgets must include the following details:
 name of the person who prepared it
 cost centre (if applicable)
 name of the budget/report, i.e. sales, expenses, CAPEX, cash flow, budget variation report
 period of the budget.
Task 3
This is an individual assessment. You are required to demonstrate the ability to review and evaluate
financial management processes. Using the scenario information supplied, you will respond to a number
of scenario tasks. You will collect and analyse financial data and make recommendations to improve
existing processes. You will also create a plan to implement and monitor solutions.
If you need help understanding any questions, ask your assessor to explain.
Procedure
 Consider the four scenario activities below along with the scenario background information and
financial information contained in the appendices of this assessment task.
 Provide written responses to the following four scenario activities.
 Submit a document containing your responses to your assessor as per the specifications
outlined below. Ensure you keep a copy of all work submitted for your records.
You must provide responses to the four scenario activities provided in this assessment task
Scenario background information

Big Red Bicycle is a bicycle manufacturer based in Bendigo, Victoria. The company produces bicycles
which it sells to retailers in the domestic Australian market.
The senior management structure of the company appears below:
Person Position
Michelle Yeo CEO
Tom Copeland Managing Director
John Black CFO
Stuart LaRoux Operations General Manager
Pat Roberts Senior Accountant
Sam Gellar Sales General Manager
Charles Pierce Production Manager
Holly Burke HR Manager
According to company strategic plans, the company had aimed to achieve a net profit before tax of
$1,000,000. Actual figures showed the company fell about $175,000 short of goals.
After successful labour cost cutting measures and improved sales team performance, the company aims
to generate a net profit before tax of $1,200,000 from Australian operations alone.
This year, in addition to Australian operations, the company is considering manufacturing overseas to take
advantage of reduced costs. The company is also considering diversifying its product range to reduce
exposure to poor sales of one product.
The board of directors of Big Red Bicycles feels that more cash will be needed to make investments to
achieve strategic aims. One chief risk to plans is bad debt and poor cash flow due to large and
unsustainable trade debtors balances quarter by quarter.
Note: Strategic plans dictate that Big Red Bicycles must reduce its debt levels and so additional financing
to increase cash flow is not an option.
Statement of Financial Performance

Big Red Bicycle
Statement of Financial Performance
For the year ended 30 June 2015
REVENUE
Sales 2,900,000
Less direct wages and Commissions 272,500
Opening stock 100,000
Purchases 300,000
Closing stock 20,000
Less cost of goods sold 380,000
Gross Profit 2,247,500
EXPENSES
General & Administrative Expenses
Travel 22,000
Legal fees 4,500
Bank charges 700
Office supplies 4,000
Postage & printing 500
Dues & subscriptions 600
Telephone 11,200
Repairs & maintenance 45,000
Payroll tax 25,000
Marketing Expenses
Advertising 208,000
Employment Expenses
Superannuation 45,000
Wages & salaries 500,000
Staff amenities 23,000
Occupancy Costs
Electricity 38,000
Insurance 100000
Rates 100,000
Rent 200,000
Water 35,000
Waste Removal 60,000
TOTAL EXPENSES 1,422,500
NET PROFIT (BEFORE INTEREST & TAX) 825,000
Income Tax Expense 206,250
NET PROFIT AFTER TAX 618,750
Ageing Debtors budget

Big Red Bicycle
AGED DEBTORS TOTAL Qtr 1 Qtr 2 Qtr 3 Qtr 4

BUDGET 2015/16
Sales 2,900,000 600,000 900,000 800,000 600,000
% Debtors Sales 50% 50% 50% 50%
Total Debtors 100% 300,000 450,000 400,000 300,000
Current 65% 195,000 292,500 260,000 195,000
30 Days 20% 60,000 90,000 80,000 60,000
60 Days 12% 36,000 54,000 48,000 36,000
90 Days 3% 9,000 13,500 12,000 9,000
Role
You are the Senior Accountant. As part of your role, you will need to complete the following four activities.
Activity 1
As you are aware, one risk to the strategic plans of Big Red Bicycle (BRB) is bad debt and poor cash flow
due to large trade debtors balances. Consider the following:
 according to its policies, Big Red Bicycles offers 30 day terms to debtors
 currently, BRB does not train sales staff on credit terms
 there is currently no enforcement of credit terms
 warehousing of stock is expensive at current leased premises
 many bicycles need to be thrown out if parts rust; this problem exacerbates the problem of
waste expense.
You have the following information from the Statement of Financial Position and current ledger accounts
in the electronic accounting system (MYOB AccountRight).
Account $
Trade debtors 362,500
Trade creditors 80,000
Opening stock 100,000
Closing stock 300,000
Purchases 1,000,000
Complete the following.
Review the Statement of Financial Performance in the appendices to calculate:

The average debtor days _________________
The average creditor days _________________
The average stock turnover ________________
Show calculations and results on your response document for this assessment task.
Consider the existing BRB ageing debtor’s budget. On your response document, make two written
recommendations for improvement to existing financial management processes to improve cash
flow. To support your recommendations, refer to data sources, organisational needs, and
analytical techniques, for example:
statement of financial performance
ledger accounts
scenario information
ageing debtors budget
ratios.
On your response document, list three sources of information of use to complete this activity.
Please answer Activity 1 here.
Activity 2
In addition to its Australian business, Big Red Bicycles is considering manufacturing a new range of
cheaper bicycles in Indonesia. The following information is available:
 the Indonesian plant has capacity to manufacture 8000 units
 Big Red Bicycle’s strategic goal is to generate a pretax profit of $1,000,000 for the next financial
year for Indonesian operations
 clients will pay a maximum of $500 per bicycle
 possibility exists for move to Indian plant with capacity for 10,000 units
 market for bicycles is growing rapidly and BRB will be able to sell everything produced
 limited ability to renegotiate costs with suppliers
 pricing and cost information is as follows.
Bicycle price per unit $500 (ex GST)

Current variable costs per $250
unit
Fixed costs $1,280,000
On your response document, work out:

how many units at current variable cost would need to be produced to achieve profit target (show
calculations)
what the variable costs per unit would need to be to achieve profit target at current
manufacturing capacity (show calculations).
On your response document, make one written recommendation based on your analysis. To support
your recommendation ensure you refer to the organisational needs or situation, and any analytical
techniques used. You may also suggest possible actions for BRB to take depending on possible
future scenarios.
On your response document, list three sources of information of possible use to complete this
activity.
Activity 3
Soon you will need to prepare a business activity statement (BAS) for the first quarter on 2016/17.
State how many years you will need to keep GST records in order to satisfy ATO requirements.
Complete the GST budget on the following page to anticipate GST liability.
July August September
Budgeted cash receipts incurring GST:

Cash sales 20,000 10,000 10,000
Cash revenue (besides sales) 0 0 0
Cash receipts from sale of assets (not stock) 0 0 0
Total receipts for GST 20,000 10,000 10,000
Budgeted non-cash receipts incurring GST:

Debtors sales 180,000 230,000 150,000
Total non-cash receipts: 180,000 230,000 150,000
Total budgeted receipts incurring GST 200,000 240,000 160,000
Budgeted cash payments incurring GST

Cash purchases of stock 0 0 0
Cash expenses 4,300 5,200 5,250
Total cash receipts incurring GST 4,300 5,200 5,250
Budgeted credit payments incurring GST
Credit purchases of stock incurring GST 25,000 30,000 25,000

Credit purchases of assets (besides stock) 4,300 5,200 5,250
Total cash payments incurring GST 29,300 35,200 30,250
Total budgeted cash payments incurring GST 33,600 40,400 35,500
GST cash budget calculations

Cash receipts
Cash payments
GST liability
Activity 4
Choose one of the recommendations from Activity 1 or 2 and develop an action plan to implement and
monitor the recommendation. Ensure you include appropriate activities, monitoring, timelines and
accountabilities.

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Assessment Submission Sheet

Course BSB51918 Diploma of Leadership and Management

Unit BSBFIM501 Manage Budgets and Financial Plans

Assessor Use Only

Assessment Items Result

Task 1 Case Study S NS

Final Result for this unit C NYC

Assessor Declaration: I declare that I have

Assessor’s Final Comments

To be deemed competent you will need to successfully demonstrate the following:

Product Required Unit Price agreed per unit ($)

Usual monthly production

Type of screen Units

Possible solutions to the labor supply problem include:

1. Evaluating the abilities of workplace and comparing it to the task needed

Timing of payment Payment under current Projected payment Projected payment

His sales figures are as follows.

(a) Describe a budget development coordination and approval process.

(d) Provide feedback on Hugo’s additional question.

To be deemed competent you will need to successfully demonstrate the following:

Appendix 1 – Big Red Bicycle Pty Ltd scenario

 poor sales due to economic downturn

In addition to Australian operations, the company is considering manufacturing overseas to take

The report should conform to organisational requirements in policies and procedures

Contingency plan for Part B

Strategies/activities to minimise the risk By when By whom

Contingency implementation plan for Part B

Activity Monitoring activity and date Person/s

Monitor variance. Completion of report: Q2. PR

Analysis of report to identify issues. Management report: Q2. PR

Email to warn employees of risk to jobs. Monitoring of variation report PR

Email to announce rise of commission from 2% to Monitoring of variation report PR

Email to inform employees that overtime will no Monitoring of variation report PR

Email to inform employees of mandatory sales Monitoring of variation report PR

Mandatory training conducted. Monitoring of variation report PR

Appendix 2 – Budgeting and finance policy

Format for budgets and reports

To be deemed competent you will need to successfully demonstrate the following:

Scenario background information

Statement of Financial Performance

NET PROFIT AFTER TAX 618,750

Ageing Debtors budget

AGED DEBTORS TOTAL Qtr 1 Qtr 2 Qtr 3 Qtr 4

Trade debtors 362,500

Trade creditors 80,000

Opening stock 100,000

Closing stock 300,000

Complete the following.

Review the Statement of Financial Performance in the appendices to calculate:

Please answer Activity 1 here.

Bicycle price per unit $500 (ex GST)

Complete the following.

On your response document, work out:

Please answer Activity 2 here.

Complete the following.

July August September

Budgeted cash receipts incurring GST:

Total receipts for GST 20,000 10,000 10,000

Budgeted non-cash receipts incurring GST:

Total non-cash receipts: 180,000 230,000 150,000