Operational Budgets Reports for Desklib Online Library

FNSACC412: Prepare operational budgets:
Assessment 3 Template
LA023597
Name Insert name here
Use your “tab” key to move from cell to cell
Student number Insert TAFE ID here
1 FNSACC412 Ed 2, June 2018

Competency summary:
Task Description Errors Allowed Number of Errors
Task 1 Theory 2
Task 2 Cost of Goods Sold
Purchases
Income Statement
Balance Sheet 8
Task 3 Cash payments budget 6
Task 4 Flexible budget 4
Task 5 Performance report 3
Overall result Satisfactory Unsatisfactory
2

Task 1
Provide and discuss four (4) specific examples of how these positive aspects of the
budgeting process operate.
As a guide, you answer should be approximately 200- 300 words (so around 50-75
words per point)
Start typing your answers where indicated. Your words will wrap at the edge of the
cell.
Example 1
Incremental Budgeting: This is the most customary example of the budgeting process.
It is simple and understandable. For attaining the budget for the current year, It takes
actual figures for last year and adds or deducts a percentage. The method of
incremental budgeting can be understood with the help of an instance. For example,
For the year 2019-20, Roe international Ltd. paid a salary of $ 4,00,000 to its
employees. Also, it is decided by the organization to give an increment of 10% to
existing employees.
Example 2
Activity based budgeting: The technique in which senior management takes all the
decisions related to budgeting. The management specifies the number of inputs
needed to attain the objectives resolute by the organization. For Example, A company
anticipates receiving 1,00,000 sales orders in the next year, with every single order
costing $5 to process. Therefore, the activity-based budget for the expenses relating to
sales orders processing for the upcoming year is $ 500,000 ($ 100,000* $5) and
expenses will be allocated with different activities. This figure may be compared to a
conventional approach to budgeting. If last year's budget called for $100,000 of sales
order processing expenses and sales were expected to grow 20%, only $ 120,000
($100,000 + ($100,000 * 20%)) is budgeted.
Example 3
Zero based budgeting: The most usual method of budgeting is zero-based budgeting.
The method accelerates through this supposition that the budget of all departments is
zero and must be restored from the scrape. In a hypothetical instance, the department
of marketing of an organization has had a budget of let's say $2 million every year.
3 FNSACC412 Ed 2, June 2018

Example 4
Value proposition budgeting: The method aims at each cost incorporated in the
budgeting process should bring value to the organization. Its primary objective is to
ignore irrelevant expenses. For Example, If a user visits the site of Zoom Video and
conferencing, he is offered by their proposition of value, and the primary reason why
people choose the site is it is given the highest rating ever by Gartner.
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