Budget Preparation for March 2
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Added on 2020-02-17
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DIPLOMA INTRODUCTION 1 TASK 11 QUESTION 1 1 Role of budget and its relation with strategic objectives 1 Prepare sales budget for March 2 QUESTION 2 10 Budget development coordination and approval process 10 Reasons for adjust or methods of communication about budgets to employees 10 Cash flow projections 11 Provide feedback on Hugo consent 14 APPENDIX 1 17 TASK A17 Budget variation report13 TASK B18 Contingency plan 18 APPENDIX 2 19 Budget preparations 19 CAPEX budget 20 Master budget 21
Budget Preparation for March 2
Added on 2020-02-17
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DIPLOMA
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1QUESTION 1...................................................................................................................................1Role of budget and its relation with strategic objectives........................................................1Prepare sales budget for March..............................................................................................2QUESTION 2.................................................................................................................................10Budget development coordination and approval process.....................................................10Reasons for adjust or methods of communication about budgets to employees..................10Cash flow projections...........................................................................................................11Provide feedback on Hugo consent......................................................................................14APPENDIX 1.................................................................................................................................17TASK A.........................................................................................................................................17Budget variation report.........................................................................................................17TASK B.........................................................................................................................................18Contingency plan..................................................................................................................18APPENDIX 2.................................................................................................................................19Budget preparations..............................................................................................................19CAPEX budget.....................................................................................................................20Master budget.......................................................................................................................21Budget notes.........................................................................................................................22Apportionment of overheads................................................................................................22CONCLUSION..............................................................................................................................22REFERENCES..............................................................................................................................24
Index of TablesTable 1: Sales budget.......................................................................................................................2Table 2: Special order......................................................................................................................3Table 3: Revised labour costs..........................................................................................................7Table 4: Material cost......................................................................................................................9Table 5: Labour costs.......................................................................................................................9Table 6: Overhead costs...................................................................................................................9Table 7: Actual cash flow..............................................................................................................11Table 8: Projected cash flow under Option 1.................................................................................12Table 9: Table 8: Projected cash flow under Option 2..................................................................13Table 10: Discount under policy 1.................................................................................................14Table 11: Discount under policy 2.................................................................................................15Table 12: Budget variation report..................................................................................................17Table 13: Revised Contingency plan.............................................................................................18Table 14: Revised contingency implementation plan....................................................................18Table 15: Master budget................................................................................................................21
Illustration IndexIllustration 1: CAPEX budget........................................................................................................20
INTRODUCTIONRole of an entity get increases with the passage of time as external market changes aretaken into considerations in improving current business performance. This report is all aboutpreparing various budgets such as sales, production and material usage in order to analyse thecurrent business performance. Cash flow projections are don that will be helpful for an entity inorder to get higher competitive advantage on the external business environment.TASK 1QUESTION 1Role of budget and its relation with strategic objectivesBudget is regarded as one of the important approach in an organisation to manage all theexpenses incurred in a business. Budgets is a written statements of all the financial resourcesincurred in a business for the betterment of the firm. Various kinds of budgets prepared in anentity as this will help an enterprise in recording all the events appropriately. Budget will act likea balancing approach in which expenses and income incurred in a business will get stabilise withthe passage of time. It is regarded as important process in an entity that will be helpful for thebusiness in order to capture higher market share. Expenditure and income incurred in a businessare properly analysed in relation to all the parameters set by an entity. Budget is important toolused for predicting the future performance of an organisation (Bagliani and Martini, 2012).Every individual uses budget in analysing its current resources in order to target higher resourcesin the external business environment. Forecasting of all the resources is essential for an entity asin this way they will grab higher opportunities. An entity will prioritize all its aims and targetswhich will be helpful for an entity in order to gain higher competitive advantage over variety ofgoals and the objectives. Quality of resources is important as the worth of money invested by afirm in the business will in turn generates higher sales and the revenue for the business.Frequency of sales need to be increases over a certain period as an entity will enhance its currentrevenue by capturing higher market share in the external business environment (Ball, 2013).It is important for an entity in order to prepare all its aims and the objectives according tothe desired aim of the business. Different kinds of budgets prepared by an entity is to overcomeall the complexities imposed on an entity as their main motive is to capture higher share in themarket. Financial resources currently available in the business need to be tracked by the business1
as their main motive is to improve the existing business performance of an enterprise with thepassage of time. Variety of budgets are prepared in a business is to improve the currentperformance of an enterprise as major motive of the business owner is to achieve all the targets.Goals and the objectives develop by an entity will be helpful for an organisation in order toascertain the overall performance of an enterprise. Role of an entity is to capture higher marketsegment by extending the product share in the external market. Products features are added in aparticular product in order to attract large number of customers towards the services offered byan entity to all its consumers located in the outside business (Ball, 2013). Getting higher level ofcustomers satisfaction s the primary goals of every enterprise as in this way their current goalwill get achieved. The current business performance of an entity will get increases with thepassage o time as majority of customers relied on the current aims and targets developed by thebusiness concern. Employees working in a business need to be satisfied by offering high qualityservices. Affordable pricing will attract large number of customers located in the externalbusiness environment as the main motive of the business concern is to steal the attention of mostof the clients towards their business. Budgets will cater all the objectives framed by an entity asthey emphasise on both qualitative and quantitative objectives. Financial performance of anentity is one of the important factors covered in the monetary performance of an entity (Baglianiand Martini, 2012).Strategic objectives are linked by an entity with the budget prepared by the business asthe role of an enterprise is to grab the attention of most of the users located in the externalmarket. Proper segmentation of all the goals and the objectives of an entity will be done based onthe existing performance of an entity. Allocation of all the responsibilities will be based on thebudget prepared by an entity in their organisation. Nature of al the objectives of an entity willdetermine the overall business performance of an entity (Ball, 2013). Qualitative aspects andmonetary aspects are linked with each other in order to ensure the overall success of the businessconcern by achieving all the desired aims and targets of an entity.Prepare sales budget for MarchTable 1: Sales budgetParticularsUnitsCost per unitAmountBasic150250325002
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