Business Fundamentals: GST Registration, Internal Controls Mechanisms, and Variance Analysis

This document discusses the GST registration, internal controls mechanisms, and variance analysis in business fundamentals. It also includes a performance report and general implications.

Running Head: BUSINESS FUNDAMENTALS 1
BUSINESS FUNDAMENTALS

Running Head: BUSINESS FUNDAMENTALS
LO 2A
GST Registration
The GST registration suggests that the companies having the turnover of $75000 or more
or the not for profit organizations has a turnover of around $150000, you provide taxi travel for
passengers in exchange for a fare as part of your business. In the opinion of the entrepreneur, it’s
the duty of the owner to register for the GST of the limit crosses $75000. It is the view of the
GST that if the owner of the company can anticipate the value of the turnover to exceed more
than $75000 than the registration can be done. Hence in this present case study the sales in the
current financial year are $56000 whereas the $70000 and in such a case the Eric is not required
to register for the registration as of now but eventually if the sales are going to increase the
registration would be necessary. Hence it is advised to register, but by law Eric can register later
on (Business Gov, 2018).
Internal Controls Mechanisms
The two major internal controls that can be followed by the Eric to have a smooth inflow
and the outflow of the cash and will overcome the businesses are as follows.
Inside control systems for the receipt of money help your independent venture avert
misfortune because of representative extortion and bookkeeping blunders. These controls are
proposed to restrict the use of the access money to specified authorities and confirm that all
receipts, discounts or moves are reported accurately and in an opportune way. Hence the cash
shall be scrutinized each and every day by the accountant to avoid any confusion and shall be
written down in the digital books to cross verify later (Gao, Qin, Yang & Dang, 2018).
The second internal control mechanism that can be implemented is the reconciliation and
keeping the cash in the safe box. After the month gets end, the general reports are recorded for ad
the same are evaluated on the monthly basis. If there are any variances found in the report the
same are communicated to the management. The relevant measures and the initiatives are
adopted in order to solve the issues.

Running Head: BUSINESS FUNDAMENTALS
Particulars Budget
Actual
costs
Actual
costs
Variances
over
Variance in
%
(10,000
units)
(12,300
units)
(10000
units)
(under)
budget
Food ingredients $34,500 37100.00 $30,162.60 -2 600 7.01%
Direct labor $73,600 74600.00 $60,650.41 -1 000 1.34%
Cafe overhead:
Variable $25,000 27000.00 $21,951.22 -2 000 7.41%
Fixed $17,000 18000.00 $14,634.15 -1 000 6%
Total $133,100 $156,700
General Implication
The general implication of the performance report suggest that the expenses such as food
ingredients, direct labor and variable overheads are more than the budgeted at the actual costs of
12300, however if the actual costs are located at 10000 units than the budgeted and the actual
cost would showcase a different approach. Hence, the overall performance of the company is
down and it needs immediate measurements and improvements.
Issue in the report
The major issue in the report that can be observed is the variation in the units. The
budgeted results are reflected on the basis of the 10000 units whereas the actual results are
calculated on the basis of the 12300 units. Henceforth, unless and until the units are same the
results are non-comparable with each other.
Particulars Budget Actual costs Variance Favorable and
Unfavorable
(10,000 units)
(10000
units)
Food ingredients $ 34,500.00 28048.78 $ 6,451.22 Favorable
Direct labor $ 73,600.00 59837.40 $ 13,762.60 Favorable

Running Head: BUSINESS FUNDAMENTALS
Cafe overhead: Variable $ 25,000.00 20325.20 $ 4,674.80 Favorable
Fixed $ 17,000.00 13821.14 $ 3,178.86 Favorable
Total $150,100
The general implication now states that the variance turns out to be positive once the
actual expenses are less than the budgeted expenses and this would help in creating the growth
opportunities for the company (Pilleboue, Singh, Coeurjolly, Kazhdan & Ostromoukhov, 2015).

Running Head: BUSINESS FUNDAMENTALS
References
Business Gov, (2018). Register for Goods and Services Tax (GST). Retrieved from
https://www.business.gov.au/registrations/register-for-taxes/register-for-goods-and-
services-tax-gst
Gao, F., Qin, L., Yang, Y., & Dang, F. (2018). Research on Information Security Internal
Control Mechanism of Intelligent Electric Grid. In 2017 4th International Conference on
Machinery, Materials and Computer (MACMC 2017). Atlantis Press.
Pilleboue, A., Singh, G., Coeurjolly, D., Kazhdan, M., & Ostromoukhov, V. (2015). Variance
analysis for Monte Carlo integration. ACM Transactions on Graphics (TOG), 34(4), 124.