Budget Control and Variance Analysis

This assignment analyzes the budget performance of an educational organization, specifically examining variances in marketing expenditures. It delves into the reasons behind overspending in areas like web design, student incentives, and advertising campaigns. The analysis also includes recommendations for improving budget control and minimizing future discrepancies.

Running head: MONITOR AND CONTROL FINANCES
Monitor and Control Finances
Name of the Student: Jamal-ud-din
Name of the University:
Student ID: 201404606
Assessment Task no: 3

1
MONITOR AND CONTROL FINANCES
Table of Contents
Introduction......................................................................................................................................2
Expenditure Overruns......................................................................................................................3
Reasons for Expenditure Overturns.................................................................................................4
Recommendations............................................................................................................................4
Reference.........................................................................................................................................6

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MONITOR AND CONTROL FINANCES
Introduction
The main purpose of this assessment is to analyze the marketing budget of Naja Group of
Colleges and determine whether there are any variances between the actual expenditure and the
projected business expenditure (Halinen, 2012). The management of the colleges have to
maintain the budgeted and actual expenditure in order to reveal the variances which occurs and
also find the reason for such variances and also incorporate measures which can rectify the
situation (Hofstede, 2012). The budgeted control statement as prepared by the management of
Naja Group of Colleges are given below:
Marketing Budget Variance
2016-17
Quarter 1
2016-17
Quarter 2
2016-17
Quarter3
2016-17
Quarter 4
Tot
al
Bud
get
To
tal
Ac
tu
al
Va
ria
nc
e
Items Bu
dg
et
Ac
tu
al
Di
ffe
re
nc
e
Bu
dg
et
Ac
tu
al
Di
ffe
re
nc
e
Bu
dg
et
Ac
tu
al
Di
ffe
re
nc
e
Bu
dg
et
Ac
tu
al
Di
ffe
re
nc
e
Redesign websites
to improve
Branding
$
1,
25
0.
00
$
2,0
00.
00
$
75
0.
00
$
1,
25
0.
00
$
2,
00
0.
00
$
75
0.
00
$
1,
25
0.
00
$
1,
00
0.
00
$
25
0.
00
$
1,
25
0.
00
$
89
0.
00
$
36
0.
00
$
5,0
00.
00
$
5,8
90.
00
$
89
0.0
0
Design an
Incentive scheme
for referrals by
students
$
60
0.
00
$
60
0.0
0
$
-
$
60
0.
00
$
75
0.
00
$
15
0.
00
$
60
0.
00
$
75
0.
00
$
15
0.
00
$
60
0.
00
$
60
0.
00
$
-
$
2,4
00.
00
$
2,7
00.
00
$
30
0.0
0
Radio
Advertisement
Campaign
$
2,
50
0.
00
$
2,5
00.
00
$
-
$
2,
50
0.
00
$
2,
50
0.
00
$
-
$
2,
50
0.
00
$
2,
50
0.
00
$
-
$
2,
50
0.
00
$
2,
50
0.
00
$
-
$
10,
000
.00
$
10,
00
0.0
0
$
-
Online
Communication
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Stand at VC
career Expo 2016
$
82
5.
00
$
2,0
00.
00
$
1,
17
5.
00
$
82
5.
00
$
82
5.
00
$
82
5.
00
$
1,
80
0.
00
$
97
5.
00
$
82
5.
00
$
82
5.
00
$
3,3
00.
00
$
3,8
00.
00
$
50
0.0
0

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MONITOR AND CONTROL FINANCES
Develop and
Publish 2016
promotional
Brochure
$
37
5.
00
$
75
0.0
0
$
37
5.
00
$
37
5.
00
$
25
0.
00
$
12
5.
00
$
37
5.
00
$
25
0.
00
$
12
5.
00
$
37
5.
00
$
25
0.
00
$
12
5.
00
$
1,5
00.
00
$
1,5
00.
00
$
-
Sponsor
community
organisation to
improve local
community
profile
$
50
0.
00
$
40
0.0
0
$
10
0.
00
$
50
0.
00
$
40
0.
00
$
10
0.
00
$
50
0.
00
$
40
0.
00
$
10
0.
00
$
50
0.
00
$
40
0.
00
$
10
0.
00
$
2,0
00.
00
$
1,6
00.
00
$
40
0.0
0
Tv Advertisment $
2,
00
0.
00
$
10,
00
0.0
0
$
8,
00
0.
00
$
1,
00
0.
00
$
7,
00
0.
00
$
6,
00
0.
00
$
75
0.
00
$
7,
00
0.
00
$
6,
25
0.
00
$
1,
25
0.
00
$
7,
00
0.
00
$
5,
75
0.
00
$
5,0
00.
00
$
31,
00
0.0
0
$
26,
00
0.0
0
Figure1: (Chart Showing Marketing Control Budget of Naja Group of Colleges)
Source: (Created by the Author)
Expenditure Overruns
Expenditure overruns can be defined as the cost which is incurred in actual circumstances
which is more than the budgeted figure of the organization. The actual expenditure of the
marketing department is much more than the budgeted figure in the first two quarter than in the
final two quarters for web designing expenditure (Winiecki, 2013). As per the budget there is an
increase in the costs which is much more than the projected cost due to the initial startup
development costs which is naturally more in the initial years as the development of the website
is done and accordingly adjusted in the initial few months. The student incentive scheme costs as
per the budget control statement meets the budget for the first and last quarter, however in the
second and third the cost has exceeded by $ 150. The radio advertisement campaign which is
introduced by the organization meets the budgeted requirements. There are no variances as per
the budget control statement as prepared by the organization in case of Radio advertisement

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MONITOR AND CONTROL FINANCES
campaign costs. The VC career expo costs has been incurred by the management in the first and
third quarter and in both the quarters the expenditures of the organization has exceeded the
budgeted figure. The actual expenditure on publishing brochure in the first quarter has exceeded
the budgeted cost and for the remaining quarters the expenditures are well within the budgeted
cost of the organization. The actual expenditures of the organization is well in the budgeted
figure of the organization. The advertisement expenditure of the colleges are much more than the
budgeted estimates of the colleges.
Reasons for Expenditure Overturns
The web designing expenses of the company is more than the budgeted expenses in the
first two quarters. As per the budget there is an increase in the costs which is much more than
the projected cost due to the initial startup development costs which is naturally more in the
initial years as the development of the website is done and accordingly adjusted in the initial few
months (Makovšek, Tominc & Logožar, 2012). The student incentive scheme costs has increased
in the second and third quarters which can be due to the increase in the number of referrals by
the current students of the organization. The radio advertisement costs of the company is as per
the budget prepared by the management. The VC Career Expo 2016 is incurred in first and third
quarter which is more due to the fees for representing the colleges as a marketing activity. The
Television expenses of the colleges is naturally high and it does not match with the budget as
prepared by the colleges. The expenses of television advertisement is more as it is a popular
medium of advertisement. Most of the organization use this form of advertisement for creating a
brand name of the company.

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MONITOR AND CONTROL FINANCES
Recommendations
In order to avoid the variances which has occurred in the current year, the management is
suggested to apply the following recommendations in the business:
1. The expenditure on web designing can be further controlled and such expenses can be
only incurred when some adjustments are to be incorporated in the budget.
2. The student incentive scheme can be segregated on the basis of number of referrals which
are brought by each student. In other words slabs of incentives should be introduced so
that the revenue of the colleges due to new admissions are always more than the cost
associated with the same.
3. The management should minimize the expenditure on radio advertisements and focus the
financial resources on television advertisements which are more productive for the
business.

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MONITOR AND CONTROL FINANCES
Reference
Halinen, A. (2012). Relationship marketing in professional services: a study of agency-client
dynamics in the advertising sector. Routledge.
Hofstede, G. H. (Ed.). (2012). The game of budget control. Routledge.
Makovšek, D., Tominc, P., & Logožar, K. (2012). A cost performance analysis of transport
infrastructure construction in Slovenia. Transportation, 39(1), 197-214.
Winiecki, J. (2013). Distorted macroeconomics of central planning. PSL Quarterly
Review, 39(157).