BSBFIM501
Manage Budget and Financial Plans
Assessment 1
|Budget | |
|Expected Site Cost | $ 80,000 |
|Security of premises | $ 6,000 |
|Surveying | $ 4,000 |
|Plumbing / electrical | $ 15,000 |
|Base stage | $ 20,000 |
|Framing | $ 55,000 |
|Lock up (roofs, flooring & windows) | $ 30,000 |
|Fixing (cabinets doors, baths, basin, sinks, cupboards & cabinets) | $ 45,000 |
|Total Cost | $ 255,000 |
CASH BUDGET
| |Q1 |Q2 |Q3 |Q4 |
|Beginning cash balance |$935 |$891 |$928 |$895 |
|Cash from operations |125 |218 |141 |156 |
|Total Available Cash |$1,060 |$1,109 |$1,069 |$1,051 |
|Less: | | | | |
| Capital expenditures |$113 |$123 |$113 |$106 |
| Interest |20 |26 |24 |25 |
| Expenses |2 |4 |3 |5 |
| Supplier Payments |50 |31 |40 |32 |
| Other |0 |0 |0 |0 |
| Total Disbursements |$185 |$184 |$180 |$168 |
|Cash Balance (Deficit) |$875 |$925 |$889 |$883 |
|Add: | | | | |
| Short-term loans |6 |3 |6 |6 |
| Long-term loans |$10 |$0 |$0 |$0 |
| Capital stock issues |0 |0 |0 |0 |
| Total Additions |16 |3 |6 |6 |
|Ending Cash Balance |$891 |$928 |$895 |$889 |
Assessment Task 2
Part 1
I have take the budget with the actual cost ask with the vendors, this is the actual figures based on the current inflation. I negotiated with different vendors and concluded these prices. The difference between budgeted figures and actual figures is a variance which is approx $10,000.
Variance is an important management tool because it enables businesses to manage their business - i.e. to take informed decisions based on management information (i.e. how actual performance compares with budgeted performance).egg; either favorable or unfavorable. A favorable variance is one where actual business performance proves to be better than what was budgeted for.
A variance is a difference between what actually happens and what is budgeted to happen.
It can differentiate between a cash flow forecast and a cash flow budget. The cash flow forecast - is a forecast of cash coming into and going out of a business based on previous experience e.g. last month, or last year. A cash flow budget is a plan usually to generate more cash coming into a business than going out.
In order to prepare a cash budget the accountant needs to know what receipts and payments are likely to take place in the future and the dates when they will happen. It is important find the length of lead time between incurring an expense and paying for it as well as the time lag between making a sale and collecting from debtors. The art of successful cash budgeting is to be able to plan and calculate accurately receipts and expenditures.
A cash-flow forecast is a table estimating (on the basis of previous experience) the amounts of money coming into and going out of a bank account each month.
Usually the cash flow forecast sets out in rows and columns:
1. A totaled up summary of money expected to come into a bank account
2. A totaled up summary of money expected to be paid out of the account
3. The expected bank balance at the end of a period e.g. week, month.
Part 2
Budget is $265,463 but on my actual taking cost budget is $255,000 which is less than $10,000 from actual because these has been based on the actual site requirement and ask for discounts from vendors.
|Budget | |
|Expected Site Cost | $ 80,000 |
|Security of premises | $ 6,000 |
|Surveying | $ 4,000 |
|Plumbing / electrical | $ 15,000 |
|Base stage | $ 20,000 |
|Framing | $ 55,000 |
|Lock up (roofs, flooring & windows) | $ 30,000 |
|Fixing (cabinets doors, baths, basin, sinks, cupboards & cabinets) | $ 45,000 |
|Total Cost | $ 255,000 |
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They can make decisions based on variance analysis. For example, if they spot unfavorable variances they can take actions such as:
• costs too high - cut out waste or change supplier
• sales too low - increase advertising/promotion/sales effort
• Production too low - look to remove bottlenecks, labor efficiency etc. 