Budgeted Income Statement for Accent Group 2019

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HI5017 Managerial Accounting
Trimester 3 2018
Individual Assignment

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Executive Summary
Management accounting is important business process and it involves preparing the
budgets for estimating the future performance and position of the company. Budgets are drafted
for shorter period as well as for longer period of time. There are many types of budgets that are
required to be developed depending upon the requirement of the company. Master budget is the
combination of all the budgets as it takes in values from all the budgets such as sales budget,
purchase budget etc.
In this financial report, elements of master budget is explained together with top down &
bottom up approach to the budget process is discussed in detail to analyse which is more suitable
for the selected company. The company selected for this purpose is Accent Group. In addition to
budgeted income statement is developed of Accent Group for year 2019 through using the
financial data of year 2018.

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Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Part A: Elements of Master Budget.................................................................................................4
Part B: Comparison of the Top-Down and Bottom-Up Approach to the Budget Process and their
Suitability for the Selected Company..............................................................................................5
Part C: Preparation of Budgeted income statement for year 2019 based on financial data of year
2018.................................................................................................................................................7
Part D: Comparison of actual income statement of year 2018 and budgeted income statement for
year 2019.......................................................................................................................................10
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

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Introduction
The present report is developed for analyzing the budgeted income statement of an ASX
listed entity. This is carried out by providing an explanation of the elements of master budget and
discussing the comparison between the top-down and bottom-up approach for the budgeted
process. This is done for analysis of the budgeted process that is more suitable for the selected
company. It is followed by developing the budgeted income statements for the selected company
for the following year on the basis of the past year annual report. This is done for providing a
comparison of the budgeted income statement prepared for the year 2019 with the actual income
statement developed for the year 2018. The company selected for analysis purpose is Accent
Group Limited, a retailing company involved in distribution of various types of footwear and
apparel products.
Part A: Elements of Master Budget
Master budget can be described as the financial plan that is developed for managing the
manufacturing and sales activity of a company for meeting the profitability goals. It is mainly
developed for estimating the future income and expenses of a company. The master budget
developed cam ne used by small-business owners for development of different specific budgets
for the business. The development of master budget requires coordination of different smaller
budgets for covering the different activities involved in an organization (Jones, 2015). As such,
the budget helps in creation of various small budgets and so the different elements of a master
budget can be described as below:
Materials Budget
The budget provides information related to acquisition of raw materials that is required
for carrying out the production process of a company. The budget helps in providing an
estimation of the material process over a period of time and thus estimates the material
requirement (Warren, Reeve and Duchac, 2011).
Labor Budget