Project Report: Manage Budgets and Financial Plan - Part 1 & 2

This project report focuses on managing budgets and financial plans for a company, covering Part 1: Develop Master Budget & Cost Centre Budget. It includes a master budget, cost centre budget, and a contingency plan to address company changes. The report analyzes the company's financia...Read More

Running Head: Manage Budgets and Financial Plan
1
Project Report: Manage Budgets and Financial Plan

Manage Budgets and Financial Plan 2
Part 1: Develop Master Budget & Cost Centre Budget
Part A: Master Budget
Que 1)
(Calculations have been given in appendix.)
Que 2)
(Calculations have been given in appendix.)
Part A.1: Cost Centre Budget
(Calculations have been given in appendix.)
Part B: Contingency plans
Through the information about changes in the company, a contingency plan has been
made for the managing director to outline those changes and their implementations in the
management of the company. Through the budgeting report of the company, it has been
analyzed that the various changes would taken place into the position and the performance of
the company (Gambacorta and Signoretti, 2014). This report depict about the changes and
their changes into the implementation management of the company to make a control over
the process and the performance of the company.
Company must be required to identify the changes and their impact over the business
firstly. This contingency plan depict that the company should manage those issues and their
impact and further, the policies and strategies must be iden6ified by the organization through
identifying and evaluating the changes (Bandy, 2013). According to the current changes,
company must work on its capacity and the price to make a control over the cost and enhance
the profit of the company.
PART C: BUDGET REVIEW & STRATEGIC PLANNING
Through the analysis and changes in the company, master plan of the company has
been prepared. Further, the actual and the budgeted figures of the company has been analyzed
and the variances have been evaluated to make a better decision about the performance and
the position of the company. Through the analysis, it has been found that the performance of
the company has been lower than the budgeted figures in all the quarters (Gali, 2015).

Manage Budgets and Financial Plan 3
Further, it has also been found that the variance rate of the company is almost similar
in all the quarter, so, the company is required to look over the main root of the variances and
work over it to enhance the profitability position and stability position of the company.
Further, through the revenues of the comapny, it has been found that the total variances of the
company are -6% in the financial year (Borio, 2014). This depict that the sales revenue of the
company has been lowered and thus the profitability position of the company has also been
lowered. Through the analysis, it has been found that the performance of the company has
been lower than the budgeted figures in all the quarters.
Further, the expenditure of the company has also been analyzed to identify the
performance of the company (Brigham and Ehrhardt, 2013). Through the total expenses
analysis of the company, it has been found that the budgeted figures are quite lower than the
actual figures which depict that the expenses of the company has been higher than the
expected. Contingency plan and their impact over the performance of the company have been
analyzed further to identify that how the company and its operations have been affected
(Grinblatt and Titman, 2016).
Through the study, it has been found that the contingency plan have positively
affected the operations of the business. this study express that this contingency plan has
improved the performance and the stability position of the company. through the variance
analysis, it has also been found that the performance of the company has been lowered in all
the quarters (Fernandes, Lynch and Netemeyer, 2014). The budgeted figures are quite
negative than the actual figures and affect the profitability position of the company.
Thus, through the above analysis, it has been found that the position of the company
has been affected and the budgeting report depict that management of the company is
required to work more over the position and performance to enhance the business and the
profitability position of the company.

Manage Budgets and Financial Plan 4
References:
Bandy, G. 2013. Financial management and accounting in the public sector. Oxon:
Routledge.
Borio, C., 2014. The financial cycle and macroeconomics: What have we learnt?. Journal of
Banking & Finance, 45, pp.182-198.
Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice.
Cengage Learning.
Fernandes, D., Lynch Jr, J.G. and Netemeyer, R.G., 2014. Financial literacy, financial
education, and downstream financial behaviors. Management Science, 60(8), pp.1861-1883.
Galí, J., 2015. Monetary policy, inflation, and the business cycle: an introduction to the new
Keynesian framework and its applications. Princeton University Press.
Gambacorta, L. and Signoretti, F.M., 2014. Should monetary policy lean against the wind?:
An analysis based on a DSGE model with banking. Journal of Economic Dynamics and
Control, 43, pp.146-174.
Grinblatt, M. and Titman, S., 2016. Financial markets & corporate strategy.

Manage Budgets and Financial Plan 5
Appendix:
Budget Variation Report FY 2011/2012
Preparered by: Pat Roberts
F
Y
Act
ual
$
V
a
r
%
V
a
r
Q1 A
c
t
u
a
l
Va
r
%
V
a
r
Q
2
Ac
tu
al
$
V
a
r
%
V
a
r
Q3 A
c
t
u
a
l
$V
ar
%
V
a
r
Q
4
Ac
tu
al
$
V
a
r
%
V
a
r
REVENUE
Commis
sions 7
7
,
5
0
0
72,
50
0
(
5
,
0
0
0
)
(
6
%
)
17
,5
00
1
5
,
0
0
0
(2,
50
0)
(
1
4
%
)
2
5
,
0
0
0
22
,5
00
(
2
,
5
0
0
)
(
1
0
%
)
17
,5
00
1
5
,
0
0
0
(2,
50
0)
(
1
4
%
)
1
7
,
5
0
0
15
,0
00
(
2
,
5
0
0
)
(
1
4
%
)
Direct
wages
fixed
2
,
0
0
,
0
0
0
2,0
0,0
00
0
.
0
0
0
% 50
,0
00
5
0
,
0
0
0
0.0
0
0
% 5
0
,
0
0
0
50
,0
00
0
.
0
0
0
% 50
,0
00
5
0
,
0
0
0
0.0
0
0
% 5
0
,
0
0
0
50
,0
00
0
.
0
0
0
%
Sales
3
1
,
0
0
,
0
0
0
29,
00,
00
0
(
2
,
0
0
,
0
0
0
)
(
6
%
)
7,
00
,0
00
6
,
0
0
,
0
0
0
(1,
00,
00
0)
(
1
4
%
)
1
0
,
0
0
,
0
0
0
9,
00
,0
00
(
1
,
0
0
,
0
0
0
)
(
1
0
%
)
7
,0
0,
00
0
8
,
0
0
,
0
0
0
1,0
0,0
00.
00
1
4
%
7
,
0
0
,
0
0
0
6
,0
0,
00
0
(
1
,
0
0
,
0
0
0
)
(
1
4
%
)
Cost
of
Good
s Sold
4
,
0
0
,
0
0
0
3,8
0,0
00
(
2
0
,
0
0
0
)
(
5
%
)
1,
00
,0
00
9
5
,
0
0
0
(5,
00
0)
(
5
%
)
1
,
0
0
,
0
0
0
95
,0
00
(
5
,
0
0
0
)
(
5
%
)
1
,0
0,
00
0
9
5
,
0
0
0
(5,
00
0)
(
5
%
)
1
,
0
0
,
0
0
0
95
,0
00
(
5
,
0
0
0
)
(
5
%
)
Gross Profit
2
4
,
2
2
,
5
0
0
22,
47,
50
0
(
1
,
7
5
,
0
0
0
)
(
7
%
)
5,
32
,5
00
4
,
4
0
,
0
0
0
(92
,50
0)
(
1
7
%
)
8
,
2
5
,
0
0
0
7,
32
,5
00
(
9
2
,
5
0
0
)
(
1
1
%
)
5
,3
2,
50
0
6
,
4
0
,
0
0
0
1,0
7,5
00.
00
2
0
%
5
,
3
2
,
5
0
0
4
,4
0,
00
0
(
9
2
,
5
0
0
)
(
1
7
%
)
EXPENSES
General &
Administrati
ve Expenses

Manage Budgets and Financial Plan 6
Trave
l 2
0
,
0
0
0
22,
00
0
2
,
0
0
0
.
0
0
1
0
%
5,
00
0
4
,
0
0
0
(1,
00
0)
(
2
0
%
)
5
,
0
0
0
6,
00
0
1
,
0
0
0
.
0
0
2
0
%
5,
00
0
6
,
0
0
0
1,0
00.
00
2
0
%
5
,
0
0
0
6,
00
0
1
,
0
0
0
.
0
0
2
0
%
Legal
Fees 5
,
0
0
0
4,5
00
(
5
0
0
)
(
1
0
%
)
1,
25
0
1
,
0
5
0
(20
0)
(
1
6
%
)
1
,
2
5
0
1,
15
0
(
1
0
0
)
(
8
%
)
1,
25
0
1
,
1
5
0
(10
0)
(
8
%
)
1
,
2
5
0
1,
15
0
(
1
0
0
)
(
8
%
)
Bank
Charg
es
6
0
0
70
0
1
0
0
.
0
0
1
7
%
15
0
2
0
0
50.
00
3
3
%
1
5
0
20
0
5
0
.
0
0
3
3
%
15
0
1
5
0
0.0
0
0
% 1
5
0
15
0
0
.
0
0
0
%
Office
Suppl
ies
5
,
0
0
0
4,0
00
(
1
,
0
0
0
)
(
2
0
%
)
1,
25
0
1
,
0
0
0
(25
0)
(
2
0
%
)
1
,
2
5
0
1,
00
0
(
2
5
0
)
(
2
0
%
)
1,
25
0
1
,
0
0
0
(25
0)
(
2
0
%
)
1
,
2
5
0
1,
00
0
(
2
5
0
)
(
2
0
%
)
Posta
ge &
Printi
ng
4
0
0
50
0
1
0
0
.
0
0
2
5
%
10
0
1
2
5
25.
00
2
5
%
1
0
0
12
5
2
5
.
0
0
2
5
%
10
0
1
2
5
25.
00
2
5
%
1
0
0
12
5
2
5
.
0
0
2
5
%
Dues
&
Subsc
riptio
ns
5
0
0
60
0
1
0
0
.
0
0
2
0
%
12
5
1
5
0
25.
00
2
0
%
1
2
5
15
0
2
5
.
0
0
2
0
%
12
5
1
5
0
25.
00
2
0
%
1
2
5
15
0
2
5
.
0
0
2
0
%
Telep
hone 1
0
,
0
0
0
11,
20
0
1
,
2
0
0
.
0
0
1
2
%
2,
50
0
2
,
8
0
0
30
0.0
0
1
2
%
2
,
5
0
0
2,
80
0
3
0
0
.
0
0
1
2
%
2,
50
0
2
,
8
0
0
30
0.0
0
1
2
%
2
,
5
0
0
2,
80
0
3
0
0
.
0
0
1
2
%
Repai
rs &
Maint
enanc
e
5
0
,
0
0
0
45,
00
0
(
5
,
0
0
0
)
(
1
0
%
)
25
,0
00
2
0
,
0
0
0
(5,
00
0)
(
2
0
%
)
2
5
,
0
0
0
25
,0
00
0
.
0
0
0
%
0.0
0
0
.
0
0
Payro
ll Tax 2
5
,
0
0
0
25,
00
0
0
.
0
0
0
% 6,
25
0
6
,
2
5
0
0.0
0
0
% 6
,
2
5
0
6,
25
0
0
.
0
0
0
% 6,
25
0
6
,
2
5
0
0.0
0
0
% 6
,
2
5
0
6,
25
0
0
.
0
0
0
%
Marketing
Expenses
0
.
0.0
0
0
.
0.0
0
0
.

Manage Budgets and Financial Plan 7
0
0
0
0
0
0
Adver
tising 2
,
0
0
,
0
0
0
2,0
8,0
00
8
,
0
0
0
.
0
0
4
% 50
,0
00
5
2
,
0
0
0
2,0
00.
00
4
% 5
0
,
0
0
0
56
,0
00
6
,
0
0
0
.
0
0
1
2
%
50
,0
00
5
0
,
0
0
0
0.0
0
0
% 5
0
,
0
0
0
50
,0
00
0
.
0
0
0
%
Employment
Expenses
0
.
0
0
0.0
0
0
.
0
0
0.0
0
0
.
0
0
Super
annu
ation
4
5
,
0
0
0
45,
00
0
0
.
0
0
0
% 11
,2
50
1
1
,
2
5
0
0.0
0
0
% 1
1
,
2
5
0
11
,2
50
0
.
0
0
0
% 11
,2
50
1
1
,
2
5
0
0.0
0
0
% 1
1
,
2
5
0
11
,2
50
0
.
0
0
0
%
Wage
s &
Salari
es
5
,
0
0
,
0
0
0
5,0
0,0
00
0
.
0
0
0
% 1,
25
,0
00
1
,
2
5
,
0
0
0
0.0
0
0
% 1
,
2
5
,
0
0
0
1,
25
,0
00
0
.
0
0
0
%
1
,2
5,
00
0
1
,
2
5
,
0
0
0
0.0
0
0
% 1
,
2
5
,
0
0
0
1
,2
5,
00
0
0
.
0
0
0
%
Staff
Amen
ities
2
0
,
0
0
0
23,
00
0
3
,
0
0
0
.
0
0
1
5
%
5,
00
0
6
,
0
0
0
1,0
00.
00
2
0
%
5
,
0
0
0
5,
00
0
0
.
0
0
0
% 5,
00
0
6
,
0
0
0
1,0
00.
00
2
0
%
5
,
0
0
0
6,
00
0
1
,
0
0
0
.
0
0
2
0
%
Occupancy
Costs
0
.
0
0
0.0
0
0
.
0
0
0.0
0
0
.
0
0
Ele
ctr
icit
y
4
0
,
0
0
0
38,
00
0
(
2
,
0
0
0
)
(
5
%
)
10
,0
00
8
,
0
0
0
(2,
00
0)
(
2
0
%
)
1
0
,
0
0
0
10
,0
00
0
.
0
0
0
% 10
,0
00
1
0
,
0
0
0
0.0
0
0
% 1
0
,
0
0
0
10
,0
00
0
.
0
0
0
%
Ins
ur
an
ce
1
,
0
0
,
0
0
0
1,0
0,0
00
0
.
0
0
0
% 25
,0
00
2
5
,
0
0
0
0.0
0
0
% 2
5
,
0
0
0
25
,0
00
0
.
0
0
0
% 25
,0
00
2
5
,
0
0
0
0.0
0
0
% 2
5
,
0
0
0
25
,0
00
0
.
0
0
0
%
Ra
tes 1
,
1,0
0,0
0
.
0
0
% 25
,0
2
5
0.0
0
0
% 2
5
25
,0
0
.
0
0
% 25
,0
2
5
0.0
0
0
% 2
5
25
,0
0
.
0
0
%

Manage Budgets and Financial Plan 8
0
0
,
0
0
0
00 0 00 ,
0
0
0
,
0
0
0
00 0 00 ,
0
0
0
,
0
0
0
00 0
Re
nt 2
,
0
0
,
0
0
0
2,0
0,0
00
0
.
0
0
0
% 50
,0
00
5
0
,
0
0
0
0.0
0
0
% 5
0
,
0
0
0
50
,0
00
0
.
0
0
0
% 50
,0
00
5
0
,
0
0
0
0.0
0
0
% 5
0
,
0
0
0
50
,0
00
0
.
0
0
0
%
W
at
er
3
0
,
0
0
0
35,
00
0
5
,
0
0
0
.
0
0
1
7
%
7,
50
0
1
0
,
0
0
0
2,5
00.
00
3
3
%
7
,
5
0
0
10
,0
00
2
,
5
0
0
.
0
0
3
3
%
7,
50
0
7
,
5
0
0
0.0
0
0
% 7
,
5
0
0
7,
50
0
0
.
0
0
0
%
W
ast
e
Re
mo
val
5
0
,
0
0
0
60,
00
0
1
0
,
0
0
0
.
0
0
2
0
%
12
,5
00
1
5
,
0
0
0
2,5
00.
00
2
0
%
1
2
,
5
0
0
15
,0
00
2
,
5
0
0
.
0
0
2
0
%
12
,5
00
1
5
,
0
0
0
2,5
00.
00
2
0
%
1
2
,
5
0
0
15
,0
00
2
,
5
0
0
.
0
0
2
0
%
TOTAL
EXPENSES 1
4
,
0
1
,
5
0
0
14,
22,
50
0
2
1
,
0
0
0
.
0
0
1
% 3,
62
,8
75
3
,
6
2
,
8
2
5
(50
)
(
0
%
)
3
,
6
2
,
8
7
5
3,
74
,9
25
1
2
,
0
5
0
.
0
0
3
%
3
,3
7,
87
5
3
,
4
2
,
3
7
5
4,5
00.
00
1
% 3
,
3
7
,
8
7
5
3
,4
2,
37
5
4
,
5
0
0
.
0
0
1
%
NET PROFIT
(BEFORE
INTEREST &
TAX)
1
0
,
2
1
,
0
0
0
8,2
5,0
00
(
1
,
9
6
,
0
0
0
)
(
1
9
%
)
1,
69
,6
25
7
7
,
1
7
5
(92
,45
0)
(
5
5
%
)
4
,
6
2
,
1
2
5
3,
57
,5
75
(
1
,
0
4
,
5
5
0
)
(
2
3
%
)
1
,9
4,
62
5
2
,
9
7
,
6
2
5
1,0
3,0
00.
00
5
3
%
1
,
9
4
,
6
2
5
97
,6
25
(
9
7
,
0
0
0
)
(
5
0
%
)
Income Tax
Expense
(25%Net)
2
,
5
5
,
2
5
0
2,0
6,2
50
(
4
9
,
0
0
0
)
(
1
9
%
)
42
,4
06
1
9
,
2
9
4
(23
,11
3)
(
5
5
%
)
1
,
1
5
,
5
3
1
89
,3
94
(
2
6
,
1
3
8
)
(
2
3
%
)
48
,6
56
7
4
,
4
0
6
25,
75
0.0
0
5
3
%
4
8
,
6
5
6
24
,4
06
(
2
4
,
2
5
0
)
(
5
0
%
)
NET PROFIT
AFTER TAX 7
,
6
6,1
8,7
50
(
1
,
4
-
1
9
%
1,
27
,2
5
7
,
-
69,
33
8
-
5
5
%
3
,
4
2,
68
,1
(
7
8
,
(
2
3
%
1
,4
5,
96
2
,
2
77,
25
0.0
0
5
3
%
1
,
4
73
,2
19
(
7
2
,
(
5
0
%

Manage Budgets and Financial Plan 9
5
,
7
5
0
7
,
0
0
0
)
19 8
8
1
6
,
5
9
4
81 4
1
3
)
) 9 3
,
2
1
9
5
,
9
6
9
7
5
0
)
)
Big Red Bicycle Company
Master Budget 2011/2012
FY Q1 Q2 Q3 Q4
REVENUE
Commissions 77,500 19375
4843.7
5
1210.93
8
302.73
44
Direct wages fixed 2,00,000 50000 12500 3125 781.25
Sales
31,00,00
0 775000 193750 48437.5
12109.
38
Cost of Goods
Sold 4,00,000 100000 25000 6250 1562.5
Gross Profit
24,22,50
0 605625
151406
.3
37851.5
6
9462.8
91
EXPENSES
General & Administrative Expenses
Travel 20,000 5000 1250 312.5 78.125
Legal Fees 5,000 1250 312.5 78.125
19.531
25
Bank Charges 600 150 37.5 9.375
2.3437
5
Office Supplies 5,000 1250 312.5 78.125
19.531
25
Postage & Printing 400 100 25 6.25 1.5625
Dues &
Subscriptions 500 125 31.25 7.8125
1.9531
25
Telephone 10,000 2500 625 156.25
39.062
5
Repairs &
Maintenance 50,000 12500 3125 781.25
195.31
25
Payroll Tax 25,000 6250 1562.5 390.625
97.656
25

Manage Budgets and Financial Plan 10
Marketing Expenses
Advertising 2,00,000 50000 12500 3125 781.25
Employment Expenses
Superannuation 45,000 11250 2812.5 703.125
175.78
13
Wages & Salaries 5,00,000 125000 31250 7812.5
1953.1
25
Staff Amenities 20,000 5000 1250 312.5 78.125
Occupancy Costs
Electric
ity 40,000 10000 2500 625 156.25
Insura
nce 1,00,000 25000 6250 1562.5
390.62
5
Rates 1,00,000 25000 6250 1562.5
390.62
5
Rent 2,00,000 50000 12500 3125 781.25
Water 30,000 7500 1875 468.75
117.18
75
Waste
Remov
al 50,000 12500 3125 781.25
195.31
25
TOTAL EXPENSES
14,01,50
0 350375
87593.
75
21898.4
4
5474.6
09
NET PROFIT (BEFORE INTEREST &
TAX)
10,21,00
0 255250
63812.
5
15953.1
3
3988.2
81
Income Tax Expense (25%) 2,55,250 63812.5
15953.
13
3988.28
1
997.07
03
NET PROFIT AFTER TAX 7,65,750 191437.5
47859.
38
11964.8
4
2991.2
11
Big Red Bicycle Company
Master Cost Centre A Q1 Q2 Q3 Q4
Administrativ
e Expenses Budget
Travel 20,000 Sales 5000 5000 5000 5000
Legal Fees 5,000 Sales 1250 1250 1250 1250
Bank Charges 600 Sales 150 150 150 150
Misc 1,000 Fixed 250 250 250 250
Office supplies 4,000 Fixed 1000 1000 1000 1000