Budget and Financial Plans: Analyzing Volume, Revenue, Expenses, Cash

This assignment focuses on analyzing budget and financial plans, particularly concerning volume, revenue, expenses, and cash management. It addresses the necessity of budgeting for volume, revenue, expenses, and cash as a crucial step in the business process, emphasizing its role in allocating capital and guiding business direction. The analysis includes evaluating volume variance, where the observed variance is deemed unfavorable due to significant differences between expected and actual amounts used, particularly highlighting an unfavorable efficiency variance. Furthermore, the assignment discusses the cost-benefit analysis of new technologies and their potential impact on marginal revenue, advocating for the use of Net Present Value (NPV) and scenario analysis to assess the financial suitability of such investments. Desklib provides a platform for students to access similar solved assignments and past papers.

Running head: MANAGE BUDGET AND FINANCIAL PLANS
Manage Budget and Financial Plans
Name of the Student:
Name of the University:
Author’s Note:

1BUDGET AND FINANCIAL PLANS
Table of Contents
In Response to Question 1..........................................................................................................2
In Response to Question 2..........................................................................................................2
In Response to Question 3..........................................................................................................3
Reference....................................................................................................................................4

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In Response to Question 1
A budget for volume, revenue, expenses and cash is necessary and it is an important
stage or part of the business process to start with. In the process of budgeting what we usually
do is we analyse and develop a expenditure plan for the capital invested in the business. The
budgeting will help ensure them that there is a proper allocation of money into different
components of business. Time spent in planning and making a budget will help them guide
the direction for their business. No, we should not proceed without a proper budget and a
plan. It should be understood that by following the budgeting process it will them keep
expose to less amount of debt or unwanted capital requirements. The budgeting plan is
necessary in the preliminary stage of the business for achieving the financial or operational
goals of the company. For companies every strategic plan there should be a proper budget
analysis. The company should be able to do a cost benefit analysis of the same so that the
unpredictability and volatility in the business gets eliminated (Bogsnes 2016).
In Response to Question 2
No, we are not happy with the observed variance. The volume variance depicts us about the
change observed between a companies expected use an actual amount of used. The simple
formula for calculating the volume variance will be the actual amount budgeted that is around
$38,900 less the actual amount that is been used that is $85,400 which was unfavourable or
the actual amount utilized in the department. The level of variance is high and if we see the
breakdown of the same it reports that around $23,650 is the favourable labour rate variance
that is good for the company while the unfavourable efficiency variance in the budget was
around $109,050 of the total unfavourable efficiency variance(Guo and Zhou 2016). The
dispersion of the unfavourable efficiency variance is something which has shown a huge
volatility and the same is not expected in the department. An unfavourable volume variance

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shows that the amount incurred for the fixed manufacturing overhead costing which is being
applied for the manufacturer’s output is far too low than or which the budgeted or expected
amount of fixed cost for the same period was planned for the budget of the department.
In Response to Question 3
The new technology which is so called to increase the marginal revenue for the
department must be considered on a cost –benefit analysis. The new technology cost should
be considered before investing into such capital expenditures. The new expenditure should be
able to show the additional cash flows that it should bring the additional cash flows. The
costs to be incurred on the technological advancement in the department will be only suitable
for the budgetary inclusion if the same will provide the company or the department will be
helpful in creating extra profit or increase in production capacity. The financial analysis
suitable for such kind of inclusion would be using the Net Present Value approach. The
budgetary process should be presented with detailed analysis and if the new equipment or
some other technologies which can bring further more advancement to the clinical
department should also be taken into consideration before finalizing the investment decisions
and approaches. The technological changes and up gradation are very volatile should be also
be taken by the using of scenario analysis if the new technology included could bring the
efficiency or the production to be better or as the same or will be worse than the current
production should also be analysed (Simon 2015).

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Reference
Bogsnes, B., 2016. Implementing beyond budgeting: Unlocking the performance potential.
John Wiley & Sons.
Guo, B. and Zhou, S., 2016. Understanding the impact of prior reviews on subsequent
reviews: The role of rating volume, variance and reviewer characteristics. Electronic
Commerce Research and Applications, 20, pp.147-158.
Simon, R., 2015. Sensitivity, specificity, PPV, and NPV for predictive biomarkers. JNCI:
Journal of the National Cancer Institute, 107(8).

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