Q10

Discuss how a business will show the findings of the

projected budget versus the actual budget and how this
might be presented.
The projected budget of the business is the forecasted estimated cost that is supposed to be spent
on the project. Meanwhile, the actual budget is the real-time amount paid by the company on a
project. The estimated budget is not sure to fulfill the need of the project. Either the estimated
budget is overestimated, or the budget is underestimated. External factors like price hike, cost
fluctuation, change in project span, etc. can make a difference in the actual funding and
estimated budget.

The difference in the projected budget and actual budget can be shown after the completion of
the project. The chart or statement can be prepared with the detail inclusion of estimated budget

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and the actual expense. For example, the reference of BM constructions actual budget and
estimate can be shown :

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BM Construction Pvt. Ltd.

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Projected budget Vs. Actual budget: The fiscal year 2020

March 2020
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Particulars Projected Actual Variance in % in

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Budget(in $) Budget(in $) Budget(in $) variance

Income:
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Income from landscaping 10000 9000 1000 10%

5000
Income from construction 100000 95000 5%

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 Total $110000 $104000 $6000 15%

Cost of goods sold - - - -

Gross Profit $110000 $104000 $600 15%

Expenses

Purchase of JCB 40000 41000 1000 2.5%

Purchase of Trucks 35000 34000 -1000 -2.85%

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Fuel expenses 25000 24500 -500 -2%

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Total expenses $100000 $99500 -$500 15.65%

Miscellaneous expenses - - - -
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None Satisfactory Not Satisfactory

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Trainer Comments

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_________________________________________________________________________________________
___________________________

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 Q11
What are budgets used for? and why might a business
consult previous company financial and statistical reports?
Budget is the finance obtained for implementing the plan and policy by spending to control Income and
expenditure, direction and coordination to get the business's target.

The business might consult its previous company financial and statistical reports for the following reason and
purpose:

 For the calculation of exact and point-to-point data and detail of the company.
 For the calculation of ratio analysis
 To point out the place for improvement in the future
 To find out the financial status of the company
 To determine the previous year's turnover, keep a record of debits and credit, opening the company's

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balance and closing balance.

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 For the performance of legal duties and responsibilities.

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None Satisfactory Not Satisfactory

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Trainer Commentss

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 3/4
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