Budgeting Practices and Negotiating Changes Assessment 2022

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FINANCE
Finance
Name of the Student:
Name of the University:
Author’s Note

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Table of Contents
Assessment Task 1...........................................................................................................................2
Budgeting Practices and Negotiating Changes............................................................................2
Identification of Issues and Negotiating Changes.......................................................................2
Basic Accounting Principles........................................................................................................3
Relevant Legislations and ATO Requirements...........................................................................4
Principle and Techniques of Managing Budgets.........................................................................5
Assessment 2...................................................................................................................................6
Company’s financial policies......................................................................................................6
Training plan................................................................................................................................7
Assessment 3.................................................................................................................................10
Variance Report.............................................................................................................................10
Modified contingency plan........................................................................................................13
Reference.......................................................................................................................................16

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Assessment Task 1
Budgeting Practices and Negotiating Changes
Budgeting is one of the process which helps the organization to achieve the financial
goals. It does helps in allocating the resources, performance evaluation and improved planning. It
is important for the organization to focus on budgeting so that it can achieve a successful
financial planning(Shaw 2016). As Big Red Bicycle Pty Ltd is aiming to achieve a net profit
before tax of $1,000,000, they have to focus on the revenue sales and control the business
expenses.
From the budget of Big Red Bicycle Pty Ltd, it can be seen that under the marketing
expenses,the organization is spending more on advertising. From the sales cost expense budget,
it can be seen that there is a huge expense on the wages.
Identification of Issues and Negotiating Changes
Some of the changes which can be done to achieve the desired net profit, is spending less
in the advertisement. Form the master budget for the financial year of 2011-12, the marketing
and advertisement expenses are same for each quarter. For a bicycle manufacturing company,
there is less need for marketing the products, as the product they are manufacturing is almost a
necessity to most of the consumers(Lauth 2014). It is important for the organization to mainly
focus on the need of the consumers and as a manufacturer they should have a good tie up with
the retailers. Big Red Bicycle Pty Ltd shouldmaintain a contract with the retailers, so that they
can only take the products from them. The salaries and fees for the marketing employees and
staffs can be deductible, and from the amount which is being saved can be used for other
purposes. Under the advertisement expenses, there can be a sponsorships included which
included where a huge amount of cash outflow is done, as there are celebrities involved. Thus,

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these are some of the costs which is not necessary for the budget and can be easily
deductible(Trenovski and Nikolov 2015).Through this way, of bonding with consumers and
understanding the needs of consumers, the marketing and advertisement expenses can be
controlled.
Another issue which can be seen from the budget of Big Red Bicycle Pty Ltd., that wages
and salaries expenses and direct wages are little higher and can be controlled. As it is a
manufacturing organization, there is a need for the labors, employees and staffs. It is important
for the Operations General Manager, Stuart LaRoux, to maintain the working environment and to
place the employees and labors according to their skills, so that they can be productive and
efficient in their own field. Through this, the process will consume less time and the laborers will
work efficiently as they will get their work respective of their skills(Badem, Ergin and Drury
2013). The organization can use new advanced machineries so that it will speed up the
production process and can manufacture more products in less time. Through this involvement of
efficient employees and use of advanced machineries, they can reduce the excess expense on the
wages and salaries.
Basic Accounting Principles
The Accounting Concepts and Principles which can be applicable in the current scenario
is that, Money Measurement Concept and Cost Concept. After the discussion of the issues that
has been found in the budget of Big Red Bicycle Pty Ltd, these concepts will help in
understanding the issues and help in the formation of new budget. In the money measurement
concept, all the transactions which is related to money are recorded here. Through this concept, it
can be monitored that the amount of cash involved in the different types of operations(Chang
2016). It is the duty of theSenior Accountant, Pat Roberts to check the amount of cash flow