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MANAGE BUDGET AND FINANCIAL PLANS

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Added on  2020-11-23

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MANAGE BUDGET AND FINANCIAL PLANS INTRODUCTION 1 TASK 11 TASK A1 TASK B5 TASK 28 TASK A8 TASK B11 TASK 312 TASK A12 A budget variance report 23 TASK B25 Modified Contingency plan 25 Modified implementation plan 27 CONCLUSION 29 REFERENCES 30 INTRODUCTION Managing the budgets and financial plans are the prime requirement of the business on which making adequate ascertainment oftheoperational practices which will be effective in relation

MANAGE BUDGET AND FINANCIAL PLANS

   Added on 2020-11-23

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MANAGE BUDGET AND
FINANCIAL PLANS
MANAGE BUDGET AND FINANCIAL PLANS_1
Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK A......................................................................................................................................1
TASK B.......................................................................................................................................5
TASK 2............................................................................................................................................8
TASK A......................................................................................................................................8
TASK B.....................................................................................................................................11
TASK 3..........................................................................................................................................12
TASK A.........................................................................................................................................12
A budget variance report...........................................................................................................23
TASK B.........................................................................................................................................25
Modified Contingency plan.......................................................................................................25
Modified implementation plan..................................................................................................27
CONCLUSION..............................................................................................................................29
REFERENCES..............................................................................................................................30
MANAGE BUDGET AND FINANCIAL PLANS_2
INTRODUCTION
Managing the budgets and financial plans are the prime requirement of the business on which making adequate ascertainment of
the operational practices which will be effective in relation with improving the financial health of the organisation. In the present
reports, there have been studies and analysis based various measures used for budget preparation and for financial planning. However,
it will be consisting of variance analysis and measuring the outcomes to have effective control over expenses incurred in business
process. Big ride bicycle has been suggested various strategies and steps that are required to be adopted in relation with making
adequate operational control over expenses. Preparation of budgets and their analysis will be effective in reference with having control
on gains and goals of business to achieve the targeted aims at the right time.
TASK 1
TASK A
The master budget has been prepared which in turn will be useful and adequate in bringing the accurate ascertainment of the
performance. To analyse the accuracy of the data base on which there have been examination of the facts which will represent the
outcomes (Ho, 2018). Thus, the actual results will be compared with the projected data set to analyse the differences in the
performance and make effective decision to bring changes in the operational functioning of the business.
Master budget:
Master Budget FY 2011/2012
FY Actual Q1 Actual Q2 Actual Q3 Actual Q4 Actual
REVENUE
Commissio
ns $
60,000.00
$
80,000.00
$
15,000.0
0
$
20,000.0
0
$
15,000.0
0
$
20,000.00
$
15,000.0
0
$
20,000.0
0
$
15,000.0
0
$
20,000.0
0
Direct
wages
fixed
$
200,000.0
0
$
200,000.0
0
$
50,000.0
0
$
50,000.0
0
$
50,000.0
0
$
50,000.00
$
50,000.0
0
$
50,000.0
0
$
50,000.0
0
$
50,000.0
0
Sales $3,000,00 $3,100,00 $750,00 $700,00 $750,00 $1,000,00 $750,00 $700,00 $750,00 $
1
MANAGE BUDGET AND FINANCIAL PLANS_3
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 700,000.
00
Cost of
Goods Sold
$
400,000.0
0
$
400,000.0
0
$100,00
0.00
$100,00
0.00
$100,00
0.00
$
100,000.0
0
$100,00
0.00
$100,00
0.00
$100,00
0.00
$
100,000.
00
Gross
Profit $2,340,00
0.00
$2,980,00
0.00
$585,00
0.00
$670,00
0.00
$585,00
0.00
$
970,000.0
0
$585,00
0.00
$670,00
0.00
$585,00
0.00
$
670,000.
00
EXPENSE
S
General &
Administrat
ive
Expenses
Accounting
fees
$
20,000.00
$
20,000.00
$
5,000.00
$
5,000.00
$
5,000.00
$
5,000.00
$
5,000.00
$
5,000.00
$
5,000.00
$
5,000.00
Legal Fees $
5,000.00
$
5,000.00
$
1,250.00
$
1,250.00
$
1,250.00
$
1,250.00
$
1,250.00
$
1,250.00
$
1,250.00
$
1,250.00
Bank
Charges
$
600.00
$
600.00
$
150.00
$
150.00
$
150.00
$
150.00
$
150.00
$
150.00
$
150.00
$
150.00
Office
Supplies
$
5,000.00
$
4,000.00
$
1,250.00
$
1,000.00
$
1,250.00
$
1,000.00
$
1,250.00
$
1,000.00
$
1,250.00
$
1,000.00
Postage &
Printing
$
400.00
$
400.00
$
100.00
$
100.00
$
100.00
$
100.00
$
100.00
$
100.00
$
100.00
$
100.00
Dues &
Subscriptio
ns
$
500.00
$
500.00
$
125.00
$
125.00
$
125.00
$
125.00
$
125.00
$
125.00
$
125.00
$
125.00
Telephone $
10,000.00
$
12,000.00
$
2,500.00
$
3,000.00
$
2,500.00
$
3,000.00
$
2,500.00
$
3,000.00
$
2,500.00
$
3,000.00
Repairs &
Maintenanc
e
$
50,000.00
$
48,750.00
$
12,500.0
0
$
12,500.0
0
$
12,500.0
0
$
11,250.00
$
12,500.0
0
$
12,500.0
0
$
12,500.0
0
$
12,500.0
0
Payroll Tax $ $ $ $ $ $ $ $ $ $
2
MANAGE BUDGET AND FINANCIAL PLANS_4
25,000.00 25,000.00 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00
Marketing
Expenses
$
-
Advertising $
200,000.0
0
$
200,000.0
0
$
50,000.0
0
$
50,000.0
0
$
50,000.0
0
$
50,000.00
$
50,000.0
0
$
50,000.0
0
$
50,000.0
0
$
50,000.0
0
Employme
nt
Expenses
$
-
Superannua
tion
$
45,000.00 $
45,000.00
$
11,250.0
0
$
11,250.0
0
$
11,250.0
0
$
11,250.00
$
11,250.0
0
$
11,250.0
0
$
11,250.0
0
$
11,250.0
0
Wages &
Salaries
$
500,000.0
0
$
400,000.0
0
$125,00
0.00
$100,00
0.00
$125,00
0.00
$
100,000.0
0
$125,00
0.00
$100,00
0.00
$125,00
0.00
$
100,000.
00
Staff
Amenities
$
20,000.00
$
20,000.00
$
5,000.00
$
5,000.00
$
5,000.00
$
5,000.00
$
5,000.00
$
5,000.00
$
5,000.00
$
5,000.00
Occupancy
Costs
Electricity $
40,000.00 $
40,000.00
$
10,000.0
0
$
10,000.0
0
$
10,000.0
0
$
10,000.00
$
10,000.0
0
$
10,000.0
0
$
10,000.0
0
$
10,000.0
0
Insurance $
100,000.0
0
$
100,000.0
0
$
25,000.0
0
$
25,000.0
0
$
25,000.0
0
$
25,000.00
$
25,000.0
0
$
25,000.0
0
$
25,000.0
0
$
25,000.0
0
Rates $
100,000.0
0
$
100,000.0
0
$
25,000.0
0
$
25,000.0
0
$
25,000.0
0
$
25,000.00
$
25,000.0
0
$
25,000.0
0
$
25,000.0
0
$
25,000.0
0
Rent $
200,000.0
0
$
200,000.0
0
$
50,000.0
0
$
50,000.0
0
$
50,000.0
0
$
50,000.00
$
50,000.0
0
$
50,000.0
0
$
50,000.0
0
$
50,000.0
0
Water $
30,000.00
$
30,000.00
$
7,500.00
$
7,500.00
$
7,500.00
$
7,500.00
$
7,500.00
$
7,500.00
$
7,500.00
$
7,500.00
3
MANAGE BUDGET AND FINANCIAL PLANS_5
Waste
Removal
$
50,000.00 $
50,000.00
$
12,500.0
0
$
12,500.0
0
$
12,500.0
0
$
12,500.00
$
12,500.0
0
$
12,500.0
0
$
12,500.0
0
$
12,500.0
0
TOTAL
EXPENSE
S
$1,401,50
0.00 $1,301,25
0.00
$350,37
5.00
$325,62
5.00
$350,37
5.00
$
324,375.0
0
$350,37
5.00
$325,62
5.00
$350,37
5.00
$
325,625.
00
NET
PROFIT
(BEFORE
INTEREST
& TAX)
$
938,500.0
0
$1,678,75
0.00
$234,62
5.00
$344,37
5.00
$234,62
5.00
$
645,625.0
0
$234,62
5.00
$344,37
5.00
$234,62
5.00
$
344,375.
00
Income
Tax
Expense
(25%Net)
$
234,625.0
0
$
419,687.5
0
$
58,656.0
0
$
86,093.7
5
$
58,656.0
0
$
161,406.2
5
$
58,656.0
0
$
86,093.7
5
$
58,656.0
0
$
86,093.7
5
NET
PROFIT
AFTER
TAX
$
703,875.0
0
$1,259,06
2.50
$175,96
9.00
$258,28
1.25
$175,96
9.00
$
484,218.7
5
$175,96
9.00
$258,28
1.25
$175,96
9.00
$
258,281.
25
Interpretation: As per considering the above listed table on which it can be said that, there have been various sources through
which big ride bicycles have generated the revenue. As per the budgeted data set where sales of each quarter have been estimated as
$750000, while in actual outcomes Q2 has sales of $1000000 and rest of the Q’s have 30% less than Q2 sales. Along with this, there
have been analysis over the various expenses like wages, repairs and maintenance. However, on the basis of which there have been
generation of effective revenue which in turn will be useful and effective to have the adequate management of operations. Thus, in
analysing the results on which it can be said that, the actual outcomes from the business is representing comparatively higher
profitability than compare to budgeted. Therefore, it is due to increment in the revenue as well as reduction in the operating expenses
4
MANAGE BUDGET AND FINANCIAL PLANS_6
of firm. In accordance with this, it will be suggested to the professionals of Big ride Bicycles that, analysing the alternatives to reduce
the operating expenses in each quarter which will result in better profitability.
TASK B
Contingency plan: This is the plan which will be effective in respect with managing the operational functions of the business
with reference to mitigate the unavoidable risks. There have been various objectives which are required to be meet by the business
professionals in accordance with having effective control over organisational operations (Maher, 2018). However, in respect with
ascertaining the impacts of changes incurred in the revenue and expenses of the organisation in each quarter where it can be said that
firm has variations in the sales revenue which is the most challenging part as it will affect the growth and profitability of firm.
Hovered, in relation with managing the business risks there are several techniques which are required to be implicated by
professionals such as
Contingency Plan
Company name: Big Red Bicycle Pty Ltd
Person developing the plan:
Name: Position:
Risk identified:
Strategies/activities to minimize the risk By when By whom
Risk management: Managing the risks which threaten the organization in both
positive and negative ways. It includes risks relevant with operations, finance, marketing as
well as meeting the competition on the right time. There might be risks relevant with
improper business management, financial governance etc. that can affect organizational
Before Q2 John Black,
Chief Financial
Officer (CFO),
Stuart LaRoux
5
MANAGE BUDGET AND FINANCIAL PLANS_7
growth and performance. In Big Ride Bicycle there is requirement for controlling general
and administration expenses that will result in improving the profitability of firm
(Ermasova and Ebdon, 2019). These are the risks which are required to be controlled and
monitored as per defining the best way to overcome with the operational challenges.
Operations
General Manager
and Pat Roberts
Senior
Accountant
Contingency Planning: There have been various unforeseen events which are
required to be considered by the business and effective plans are to be made by them to
undertake events and mitigate the operational risks (Maher, Fakhar and Karimi, 2018). In
this there are issues which can be relevant with financial crisis, operational drawbacks as
well as in appropriate demands for the produced goods. The risks and issues which have
been effecting the operational management and issues that can be adequate with reference
to bring the best qualitative control.
After Q1 Michelle Yeo
Chief Executive
Officer (CEO)
and Tom
Copeland
Managing
Director
Managing funds flow: inflows and outflows of the funds must be monitored and
executed by the accounting professionals with reference to reduce chances of financial
crisis. It can be relevant with sales, profits, geographical coverage, product line
management and market share of individual (Srithongrung, 2018). An accounting
professionals is being required to undertake initiative for controlling the costs implicated in
each activities.
Between Q2-3 Pat Roberts
Senior
Accountant
Simulating the future: Professionals at Big Ride Bicycle must make effective
plans and operational ascertainment which brings them accurate determination of future
risks. Thus, budget preparation in accordance with the market demands for the products
(Saad, 2018). Thus, such reports or simulation will be effective in decision making as well
After Q3 Sam Gellar Sales
General Manager
and Charles
Pierce
6
MANAGE BUDGET AND FINANCIAL PLANS_8

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