FNSACC503 Manage Budgets and Forecasts Assignment Help

FNSACC503 Manage Budgets and Forecasts Assignment Help

FNSACC503 Manage Budgets and Forecasts Assignment Help

Q1.

AJ Ltd provides the following information:

Selling price

$10.00 per unit

100%

Variable cost

-$7.00 per unit

70%

Contribution Margin

$3.00 per unit

30%

Total Fixed Cost

$300,000 per annum

 

Required:

( a )Calculate the sales breakeven in dollars: (show your workings)

FNSACC503 Manage Budgets and Forecasts Assignment Help

( b )Prepare a projected Income Statement at a sales volume of 160,000 units:

Projected Income Statement

Sales volume

160,000 units

Sales revenue

$1,600,000

Less: Variable costs

$1,120,000

Contribution Margin

$480,000

Less: Fixed costs

$300,000

Profit before Tax

$180,000

The following questions are based on the material in Chapter 2:FNSACC503 Manage Budgets and Forecasts Assignment Help

Q2.

The following is a budget prepared by Jacob’s Gardening (on a cash accounting basis) for the 3 months ending 31 March.

 

Jan

Feb

Mar

Total

Income

 

 

 

 

Fees received

$80,000

$90,000

$100,000

$270,000

 

 

 

 

 

Expenses

 

 

 

 

Wages

10,000

11,000

12,000

33,000

Office expenses

4,000

4,200

4,800

13,000

Equipment expenses

2,200

2,400

2,600

7,200

Motor vehicle expenses

5,800

5,200

5,000

16,000

Advertising

8,000

9,000

10,000

27,000

Other

3,400

3,600

3,000

10,000

Total Expenses

33,400

35,400

37,400

106,200

Profit

46,600

54,600

62,600

163,800

The following assumptions are used to prepare the April budget by using the March figures:

1.Fees received are expected to fall by 10%

2.Wages will rise by 1%

3.All other expenses will rise by 5%

Required:

( a )Using the layout below, complete a budgeted Income Statement for April.

 

March

(Budgeted)

Expected

Change

April

(Budgeted)

Receipts

 

 

 

Fees received

$100,000

-10%

$90,000

 

 

 

 

Payments

 

 

 

Wages

$12,000

+1%

$13,200

Office expenses

$4,800

+5%

$5,040

Equipment expenses

$2,600

+5%

$2,730

Motor vehicle expenses

$5,000

+5%

$5,250

Advertising

$10,000

+5%

$10,500

Other

$3,000

+5%

$3,150

Total Payments

37,400

+6.6%

$39,870

Profit

$62,600

-10%

$50,130

( b )Using the layout below, determine the closing cash projection for April if the opening balance of cash for January was overdrawn by $25,010. Ignore the impact of GST.

Cash Budget

Cash balance at the start

-$25,010

Add: Receipts

$90,000

= Cash Available

 

$64,990

Less: Payments

$39,870

= Cash balance at the end

$25,120

The following questions are based on the material in Chapter 3:

Q3.

Expected sales (in units) are as follows:

 

January

February

March

April

May

Sales (units)

10,000

11,000

12,000

13,000

14,000

Opening stock of finished goods is required to be 50% of that month’s expected sales.

Each unit produced requires 1kg of raw material at a cost of $6 per kg.

Each month’s opening stock of raw material must be sufficient to satisfy that month’s production.

Required: Prepare a Material Purchases Budget in units and dollars for the months of January to March.

Production Budget (Units)

 

January

February

March

April

May

Sales (units)

10,000

11,000

12,000

13,000

14,000

Add: Closing Inventory

5,500

6,000

6.500

7,000

7,500

Less: Opening Inventory

5,000

5,500

6,000

6,500

7,000

= Production

10,500

11,500

12,500

13,500

14,500

Raw Material Purchases Budget (kg & $)

 

January

February

March

April

Usage (kg)

10,500

11,500

12,500

13,500

Add: Closing Inventory

11,500

12,500

13,500

14,500

Less: Opening Inventory

10,500

11,500

12,500

13,500

= Purchases (kg)

11,500

12,500

13,500

14,500

= Purchases ($)

69,000

75,000

81,000

87,000

Get More Information - Business Strategy Assignment Help

Q4.

Amy’s Dolls Pty Ltd provides us with the following information concerning factory overhead.

Department 1

Production

10,000 units

Variable overhead

$1.00 per unit

Fixed cost

$8,000

Department 2

Production

8,000 units

Variable overhead

$1.20 per unit

Fixed cost

$12,000

Required: Prepare a factory overhead budget for each department and in total.

 

Department 1

Department 2

Total

Budgeted Production (units)

10,000

8,000

 

Variable overhead per unit ($)

$1

$1.20

Variable overhead cost ($)

$10,000

$9,600

Fixed overhead ($)

$8,000

$12,000

Total overhead ($)

$18,000

$21,600

$39,600

 Q5.

Booth manufactures football scarves.

Each unit has the following production requirements:

 

 

$

Material

1 metre @ $10 per metre

10.00

Direct Labour

1 hour @ $20 per hour

20.00

Manufacturing Overhead

100% of Direct Labour cost

20.00

Total per unit

 

$50.00

The production budget for the quarter to December is:

October

November

December

1,000 units

2,000 units

3,000 units

Required: Prepare the cost of production and supporting budgets for the December quarter.

Booth – Cost of Production Budget

Cost of Production Budget

October

November

December

Production (units)

1,000

2,000

3,000

Cost of production ($)

50,000

100,000

150,000

Materials Usage Budget

October

November

December

Material (metres)

1,000

2,000

3,000

Cost of material @$10 per mt ($)

10,000

20,000

30,000

Labour Budget

October

November

December

Labour (hours)

1,000

2,000

3,000

Cost of labour @$20 per DL hr ($)

20,000

40,000

60,000

Overhead Budget

October

November

December

OH Cost @100% of DL cost ($)

20,000

40,000

60,000

Total Production Costs

October

November

December

Total must be as per Cost of Production ($)

50,000

100,000

150,000

The following questions are based on the material in Chapter 4:

Q6.

The following information relates to the business of L & B Computers.

Actual Credit Sales amount to:

March

April

May

$6,930

$5,390

$2,970

Customers normally pay their debts at the following rate:

1.80% in first month after sale               2. 20% in second month after sale

Estimated Credit Sales:

June

July

August

$4,840

$5,610

$4,180

Required: Prepare an Accounts Receivable collections budget, for the months of June, July and August.

L&B Computers Accounts Receivable Collections Budget

 

April

May

June

July

August

Credit Sales $

$5,390

$2,970

$4,840

$5,610

$4,180

Collections:

 

 

 

 

1 month

2,376

3,872

4,488

2 months

 

594

968

Total Receipts $

2,376

4,466

5,456

Q7.

The Speedy Sports Club is preparing its operating expense budget for the September quarter.

You are required to prepare a forecast of expenses paid each month, and for the quarter, using the data they provide.

Assume all cash expenses are paid for in the month they are incurred unless otherwise stated.

Round all amounts to the nearest dollar.

1.The club employs four full-time staff. The secretary-manager’s current salary is $4,800 per month.

2.The other three full-time staff members are currently paid $3,500 per month each. An enterprise agreement will increase all full-time salaries by 8% from 1st September.

3.Part-time staffs currently earn $22 per hour. This is to increase by $1.50 per hour from 1 August.

4.Estimated part time hours for the budget period are:

July                  = 380 hrs

August              = 320 hrs

September      = 410 hrs

5.Employee overheads (workers’ compensation etc) are 8.5% of salaries and wages.

6.Sporting trophies are expected to cost $2,420 in July and $1,600 in September.

7.The club pays $340 per month for telephone and internet. Electricity and gas are billed every three months. The electricity and gas bill for the June quarter is estimated at $1,100 and is due for payment in July.

8.Other operating expenses amount to $6,400 per month.

9.Depreciation on sporting and recreation facilities is charged at 15% p.a. on cost of $92,000. The monthly depreciation is included in the ‘Other operating expenses’ above.

Full time staff

Salary $

% Increasefrom1/9

July $

August $

September $

Quarter $

Secretary-Manager

4,800

+8%

4,800

4,800

5,184

14,784

Fulltime staff (3)

$10,500

+8%

3,500

3,500

3,780

10,780

Cost of full time staff

8,300

8,300

8,964

25,564

Part time staff

July

August

September

Quarter

Hours

380

320

410

1,110

Rate ($ per hour)

22

23.5

23.5

22.98

Cost of part time staff

8,360

7,520

9,635

25,515

Total Full Time + Part Time

July

August

Sept

Quarter

Totalwages and salaries

16,660

15,820

18,599

51,079

Employee overheads

1,416.1

1,344.7

1,580.92

4,341.72

Totallabour costs paid

18,076.1

171,64.7

20,179.92

55,420.72

Expenses Payable Budget

 

July

August

September

Quarter

 Labour costs

18,076.1

171,64.7

20,179.92

55,420.72

Trophies

2,420

-

1,600

4,020

Utilities

1,440

340

340

2,120

Other expenses * (exclude monthly deprecn.)

5,250

5,250

5,250

15,750

Totalexpenses paid

27,186.1

22,754.70

27,369.92

77,310.72

* Depreciation per month = 92,000*15%/12 = 1,150 (Castillo, 2015)

The following questions are based on the material in Chapter 5:

Q8.

Ridge and Roberts are partners in a small accounting firm. Income and expenses for the year ended 30 June 2015 were:

Fees Income

$ 224,000

Marketing Expenses

$ 6,900

Other Income

52,000

Other Expenses

2,000

Office Wages

31,000

Insurance

8,800

Office Expenses

9,600

Rent

11,200

For the year ending 30 June 2016, budgets are to be based on the following:

1.Fees income is expected to rise by 9%.

2.Other income is expected to rise by 3%.

3.Office expenses, Office wages, and Other Expenses will rise by 2%.

4.Insurancewill rise by 6%.

5.Rent will rise by 3%.

6.Marketing expenses will rise by 7%.

Required:Prepare the Income Statement for year ended 30 June 2015 and prepare a  budgeted Income  Statement for the year ending 30 June 2016.

Income Statement 2015

 

Budgeted Income Statement 2016

 

$

$

Increase %

$

$

Fees Income

 

$224,000

+9%

 

$244,160

Other Income

 

$52,000

+3%

 

$56,680

Total Income

 

$276,000

 

 

$300,840

Less Expenses:

 

 

 

 

 

Office wages

$31,000

 

+2%

$31,620

 

Office Expenses

$9,600

 

+2%

$9,792

 

Marketing Expenses

$6,900

 

+7%

$7,383

 

Other Expenses

$2,000

 

+2%

$2,040

 

Insurance

$8,800

 

+6%

$9,328

 

Rent

$11,200

$69,500

+3%

$11,536

$71,699

Net Profit

 

$206,500

 

 

$229,141

Q9.The following budgeted bank account is given for Bennett and Gould:

Cash at Bank

01/7/15

Balance b/d

4,000

30/6/16

Operating Expense

30,000

30/6/16

Cash sales

75,000

 

Plant (purchase)

20,000

 

Finance Ltd. — Loan

20,000

 

Drawings — Bennett

25,000

 

Motor Veh.(sale)

2,000

 

Cash purchases

55,000

 

Interest received

500

 

Accounts Payable

4,000

 

Accounts Receivable

50,000

 

Balance c/d

17,500

 

 

151,500

 

 

151,500

Required:Prepare a budgeted Statement of Cash Flows of Bennett and Gould for the year ended 30 June 2016 in a form consistent with AASB 107. Ignore GST for this question.

Budgeted Statement of Cash Flows for the year to end 30 June 2016

 

$

 Cash flows from operating activities

Receipts from customers

$75,000

Payments to suppliers

$55,000

Expenses paid

$30,000

Interest received

$500

Changes in working capital

$46,000

Net cash from operating activities

$36,500

 Cash flows from investing activities

Proceeds from sale of motor vehicle

$2,000

Payments for plant

$20,000

Net cash from investing activities

-$18,000

 Cash flows from financing activities

Proceeds of loan

$20,000

Payments for drawings

$25,000

Net cash from financing activities

-$5,000

Net change in cash balance

$13,500

Cash balance at the start of the year

$4,000

Cash balance at the end of the year

$17,500

The following questions are based on the material in Chapter 6:

Q10.

Baron Breck Inc. uses a flexible budget and anticipates operating at between 60 and 90 per cent of maximum capacity for June. The budget summary below hasbeen completed for the 60% and 70% activity levels.

 

Sales

60%

70%

80%

90%

$120,000

$140,000

 

 

Cost of goods

84,000

98,000

 

 

Contribution margin

36,000

42,000

 

 

Operating expenses ( commission )

29,000

33,000

 

 

Operating profit

7,000

9,000

 

 

Taxation 30%

2,100

2,700

 

 

Net profit after tax

$4,900

$6,300

 

 

 

 

Assume thatcost of goods sold varies directly with sales, and that$5,000 of operating expenses are fixed while the remainder vary directly with sales. Taxation will remain at 30% of operating profit.

Required:Using the format below, complete the flexible budget for June at 80% and 90% levels.

Flexible Budget for June

 

Operating Activity Level

 

60%

70%

10%

80%

90%

Sales

$120,000

$140,000

$20,000

$160,000

$180,000

Cost of Goods Sold

$84,000

$98,000

$14,000

$112,000

$126,000

Gross Profit

 

$48,000

$54,000

Operating Expenses

$29,000

$33,000

$9000

$37,000

$41,000

Operating Profit

 

$11,000

$13,000

Taxation 30%

$3,300

$3,900

Net Profit After Tax

$7,700

$9,100

(Gallani, et.al, 2016)

Q11.

Vinton Industries uses flexible budget techniques in order to effectively control costs. The data produced for the December quarter before analysis indicates the following:

Costof Production Items

Budget

Actual

 

$

$

Raw material

90,000

95,700

Direct labour

108,000

114,750

Variable factory overhead

54,000

57,000

Fixed factory overhead

63,000

62,500

Total

$315,000

$329,950

The original budget for the December quarter was planned at a level of 180,000 units of production. The quarter’s actual level of production was 195,000 units. Raw material, direct labour and variable manufacturing expense are proportional to the units produced.

Required:

 ( i ) A flexible budget for the December budget.

( ii )A performance report for the quarter.

( i ) Flexible budget for the  December budget:

 

Actual Cost

Flexible Budget

Variance

$

Variance

%

Fav. (F) or

Unfav. (U)

Raw material

95,700

97,500

1,800

1.85

F

Direct labour

114,750

117,000

2,250

1.92

F

Variable factory overhead

57,000

58,500

1,500

    2.56

F

Fixed factory overhead

62,500

63,000

500

0.79

F

Total Cost of Production

329,950

381,175

51,225

13.44

F

( ii ) The performance for the quarter is best described as (select one):

1.Actual production was 180,000, which was 15,000 less than budgeted for. All costs were higher than the flexible budget costs for the actual production level.

2.Actual production was 195,000, which was 15,000 less than budgeted for. All costs were lower than the flexible budget costs for the actual production level.

3.Actual production was more than budgeted for. All costs were the same as the flexible budget.

4.Actual production was 195,000, which was 15,000 more than budgeted for. All costs were lower than the flexible budget costs for the actual production level.

Record your choice here = d.

Q12.

Dimmi Pty Ltd manufactures a single product and is capable of producing 80,000 units per year. A budgeted Income Statement for the current year is shown below:FNSACC503 Manage Budgets and Forecasts Assignment HelpRequired:Calculate the contribution margin in total and per unit using direct costing.

 

Total $

$ per Unit

Sales

576,000

8

Less Variable Costs:

 

 

Production Costs

162,000

2.25

Selling & Administration Expenses

54,000

0.75

Total Variable Costs

216,000

3

Contribution Margin

360,000

5

References

Abdullahi, S.R. And Kuwata, G., 2014, “The Role of Budget And Budgetary Control On Organisational Performance: A Case Study Of Tahir Guest House, Kano State, Nigeria”, International Journal of Innovative Research in Information Security, vol. 4, issue 2, pp. 22-28.

Basuki, F.H., 2015, “Participatory Budgeting And Managerial Performance In Conditions Of Information Asymmetry”, vol. 13, no. 6, pp. 4529-4555.

Castillo, M., 2015, “Reflections on Participatory Budgeting in New York City”, The Innovation Journal, 20(2), pp. 1-11.

Gallani, S., Krishnan, R., Marinich, E.J. and Shields, M.D., 2016, “Budgeting, Psychological Contracts, and Budgetary Misreporting”, Harvard Business School.

Liapis, K. and Spanos, P., 2015. Public Accounting Analysis under Budgeting and Controlling Process: The Greek Evidence. Procedia Economics and Finance, 33, pp.103-120.