Budgeting Performance of Big Red Bicycle Pty Ltd

This report provides an analysis of the budgeting performance of Big Red Bicycle Pty Ltd for FY 2011-12. It includes CAPEX, sales, expenses, cash flow and master budgets. The report suggests changes to improve the financial objectives of the business.

BSBFIM501 Manage budgets and financial plans
Project Report: Assessment No. 2

BSBFIM501 Manage budgets and financial plans
Task A:
CAPEX budget:
Big Red Bicycle Pty Ltd
CAPEX Budget FY 2011-12
FY Q1 Q2 Q3 Q4
CAPEX
PPE 16,350 500,000
Building 654,000 654,000
Sales Budget:
Big Red Bicycle Pty Ltd
Sales Budget
FY Q1 Q2 Q3 Q4
REVENUE
Sales 2,480,000 560,000 800,000 560,000 560,000
Expenses budget:
Big Red Bicycle Pty Ltd
Expenses Budget FY 2011-12
FY Q1 Q2 Q3 Q4
EXPENSES
General & Administrative
Expenses
Accounting fees 15,000 5,000 5,000 5,000 5,000

BSBFIM501 Manage budgets and financial plans
Legal fees 5,000 1,250 1,250 1,250 1,250
Bank charges 600 150 150 150 150
Office supplies 5,000 1,250 1,250 1,250 1,250
Postage &
printing
400 100 100 100 100
Dues &
subscriptions
500 125 125 125 125
Telephone 10,000 2,500 2,500 2,500 2,500
Repairs &
maintenance
25,000 12,500 12,500 12,500 12,500
Payroll tax 10,000 6,250 6,250 6,250 6,250
Marketing Expenses
Advertising 100,000 25,000 25,000 25,000 25,004
Employment Expenses
Superannuation 37,200 9,300 9,300 9,300 9,300
Wages &
salaries
200,000 50,000 50,000 50,000 50,000
Staff amenities 20,000 5,000 5,000 5,000 5,000
Occupancy Costs
Electricity 17,567 4,392 4,392 4,392 4,391
Insurance 50,000 12,500 12,500 12,500 12,499
Rates 50,000 12,500 12,500 12,500 12,499
Rent 90,000 22,500 22,500 22,500 22,500
Water 15,000 3,750 3,750 3,750 3,750
Waste removal 35,000 8,750 8,750 8,750 8,749
TOTAL EXPENSES 686,267 182,817 182,817 182,817 182,817
Cash budget:
Big Red Bicycle Pty Ltd
Cash flow Budget FY 2011-12
FY Q1 Q2 Q3 Q4
Cash inflow
Sales 2,480,00
0
560,00
0
800,00
0
560,00
0
560,00
0
Total cash inflow 2,480,00
0
560,00
0
800,00
0
560,00
0
560,00
0

BSBFIM501 Manage budgets and financial plans
Cash Outflow
Commissions (2.5%
sales)
62,000 14,000 20,000 14,000 14,000
Direct wages fixed 200,000 50,000 50,000 50,000 50,000
Cost of Goods Sold 198,400 44,800 64,000 44,800 44,800
PPE 16,350 500,00
0
Building 654,000 654,00
0
Accounting fees 15,000 5,000 5,000 5,000 5,000
Legal fees 5,000 1,250 1,250 1,250 1,250
Bank charges 600 150 150 150 150
Office supplies 5,000 1,250 1,250 1,250 1,250
Postage & printing 400 100 100 100 100
Dues & subscriptions 500 125 125 125 125
Telephone 10,000 2,500 2,500 2,500 2,500
Repairs & maintenance 25,000 12,500 12,500 12,500 12,500
Payroll tax 10,000 6,250 6,250 6,250 6,250
Advertising 100,000 25,000 25,000 25,000 25,004
Superannuation 37,200 9,300 9,300 9,300 9,300
Wages & salaries 200,000 50,000 50,000 50,000 50,000
Staff amenities 20,000 5,000 5,000 5,000 5,000
Electricity 17,567 4,392 4,392 4,392 4,391
Insurance 50,000 12,500 12,500 12,500 12,499
Rates 50,000 12,500 12,500 12,500 12,499
Rent 90,000 22,500 22,500 22,500 22,500
Water 15,000 3,750 3,750 3,750 3,750
Waste removal 35,000 8,750 8,750 8,750 8,749
Total cash outflow 1,817,01
7
291,61
7
816,81
7
945,61
7
291,61
7
Net cash
flow 662,983
268,38
3 -16,817
-
385,61
7
268,38
3
Masters budget:
Big Red Bicycle Pty Ltd

BSBFIM501 Manage budgets and financial plans
Master Budget FY 2011-12
FY Q1 Q2 Q3 Q4
REVENUE
Commissions (2.5% sales) 62,000 14,000 20,000 14,000 14,000
Direct wages fixed 200,000 50,000 50,000 50,000 50,000
Sales 2,480,000 560,000 800,000 560,000 560,000
Cost of Goods Sold 198,400 44,800 64,000 44,800 44,800
Gross Profit 2,019,600 451,200 666,000 451,200 451,200
EXPENSES
General & Administrative Expenses
Accounting fees 15,000 5,000 5,000 5,000 5,000
Legal fees 5,000 1,250 1,250 1,250 1,250
Bank charges 600 150 150 150 150
Office supplies 5,000 1,250 1,250 1,250 1,250
Postage & printing 400 100 100 100 100
Dues & subscriptions 500 125 125 125 125
Telephone 10,000 2,500 2,500 2,500 2,500
Repairs & maintenance 25,000 12,500 12,500 12,500 12,500
Payroll tax 10,000 6,250 6,250 6,250 6,250
Marketing Expenses
Advertising 100,000 25,000 25,000 25,000 25,004
Employment Expenses
Superannuation 37,200 9,300 9,300 9,300 9,300
Wages & salaries 200,000 50,000 50,000 50,000 50,000
Staff amenities 20,000 5,000 5,000 5,000 5,000
Occupancy Costs
Electricity 17,567 4,392 4,392 4,392 4,391
Insurance 50,000 12,500 12,500 12,500 12,499
Rates 50,000 12,500 12,500 12,500 12,499
Rent 90,000 22,500 22,500 22,500 22,500
Water 15,000 3,750 3,750 3,750 3,750
Waste removal 35,000 8,750 8,750 8,750 8,749
TOTAL EXPENSES 686,267 182,817 182,817 182,817 182,817
NET PROFIT (BEFORE INTEREST 1,333,333 268,383 483,183 268,383 268,383

BSBFIM501 Manage budgets and financial plans
& TAX)
Income Tax Expense (25%Net) 333,333 67,096 120,796 67,096 67,096
NET PROFIT AFTER TAX 1,000,000 201,287 362,387 201,287 201,287
On the basis of the above budgets, it has been found that the budgeting performance
of the company is quite different than the actual data of the company and thus it becomes
important for the senior accountant and the financial manager to make few changes into the
performance and the strategies of the business.
The overall financial objectives of the business are to maximize the profits through
improving the total turnover of the business and reducing the expenses of the business. It has
been found that the overall performance of the business has been reduced from the budgeted
data of the business and thus the management must consider the failure points and must work
on that to improve the overall position of the business.
Task B:
Petty Cash Book
Date Receiv
ed
Details Ref Pai
d
Station
ery
Cleani
ng
Trav
el
Off
Supp
GS
T
2-
Jan
800 Amount Received
3-
Jan
Bought Petty cash
book
1 22 19.8 2.2
4-
Jan
supplies amount 2 105 94.5
9-
Jan
Cleaning supplies 3 135
.3
121.77 13.
53
10-
Jan
Taxi Fare 4 52.
8
52.8
315
.1
19.8 121.77 52.8 94.5 15.
73
11-
Jan
484.9 484
.9
11-
Jan
Cash Baalnce B/d
13- Taxi fare 5 66 59.4 6.6

BSBFIM501 Manage budgets and financial plans
Jan
16-
Jan
stationery
supplies
6 33 29.7 3.3
17-
Jan
Office supplies 7 82 82
19-
Jan
calculator 8 61.
6
55.44 6.1
6
23-
Jan
taxi fare 9 44 39.6 4.4
30-
Jan
newspaper 10 105
.6
105.6
392
.2
85.14 0 99 187.6 20.
46
30-
Jan
92.
7
30-
Jan
Cash balance c/d 92.
7