Apple Company Operating Budget
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Apple Company Budget
Budgeting refers to the premeditated execution of an organization’s business plan. Budgeting is meant to assist the organization to attain the goals set in its strategic plan. For instance at Apple, “Capturing Bigger Market Share as Well as Producing Quality Durable Products” is our goal. To achieve this goal as a company, we need a budget that can be able to finance our business plan, help in setting measures as well as indicators of performance and make the necessary changes as we progress which will ensure that the company’s goal is realized. In this paper, I will present the Operating and Capital Budgets of Apple Company (Rubin, 2016).
Operating Budget
This is the Apple budget category that shows the Company’s revenues and the associated operating expense of the daily activities of the Company (Hirth, & Steckel, 2016).
Annual Apple Company Operating Budget
Revenue (Anticipated) $
Total Computer Sales 900,000,000
Total iPhone Sales 510,000,000
Total Apple Watch Sales 440,000,000
Total Apple iPad Family Sales 490,000,000
Total Revenue $2,340,000,000
Expenses (Anticipated)
1. Administration $
Office supplies and Equipment 20,000,000
General insurance 90,000,000
Liability (vehicles) 15,000,000
Liability (operations/premises) 15,000,000
Sales Interests 25,000,000
Inventories 15,000,000
Total Administrative Expenses $190,000,000
2. Salaries, Wages & Benefits $
Employees salaries and wages 300,000,000
FICA (Social Security) 75,500,000
Health care & group life insurance 80,000,000
Employees’ retirement benefits 110,000,000
Total Salaries, Wages& Benefits $565,500,000
3. General Operations $
Branch offices rent & mortgage 60,000,000
Food 30,000,000
Staff travel 20,000,000
Staff training 10,000,000
Maintenance & repair 5,000,000
Costs of Materials for New Project 100,000,000
Execution
Total General Operations Expenses $225,000,000
4. Marketing Expenses $
Marketing/ PR Consultants 40,000,000
Advertising Agencies 12,000,000
Social Media Specialists 15,000,000
Media Advertising 30,000,000
Website Advertising 50,000,000
Networking 32,000,000
Total Marketing Expenses $191,000,000
5. Other Miscellaneous Expense $60,000,000
TOTAL EXPENSES $1,231,500,000
Capital Budget
This is the Apple budget category that is aimed at allocating resources, controlling risks in decision making as well as setting priorities in the Company’s long term operations.
For instance, the Apple Company will invest on liquid metal Technologies worth $320 million annually and buying more manufacturing machines which will cost the company around $260,000,000 annually (Brüggen, & Luft, 2015).
Liquid metal Technologies will help the Apple Company to make advanced iPhone antennas as well as seamless gadget cases that will contain holographic logos that will be cast right to the metal. This will be in line with the Company’s goal of producing quality durable products which will move the world to the next level. Also, the liquid metal technology products will market the company's products in the global market as it will be totally unique from other software company products. This will further give the company a competitive advantage in the market (Agénor, & Neanidis, 2015).
Additional machinery into the company will ensure that the quality products that are already being produced will at an increased pace from the production line. From the company’s goal, acquiring a large portion in the market has been factored. It’s good to note that, it will not be easier for the company to get a larger market share if it cannot satisfactorily meet its customers’ demand. With the additional machinery, the company will increase its productivity hence satisfying its customers fully (Bill, & Brown, 2017).
References:
Agénor, P. R., & Neanidis, K. C. (2015). Innovation, public capital, and growth. Journal of Macroeconomics, 44, 252-275.
Bill, A., & Brown, H. M. (2017). BUDGET ESTIMATES.
Brüggen, A., & Luft, J. L. (2015). Cost estimates, cost overruns, and project continuation decisions. The Accounting Review, 91(3), 793-810.
Hirth, L., & Steckel, J. C. (2016). The role of capital costs in decarbonizing the electricity sector. Environmental Research Letters, 11(11), 114010.
Rubin, I. S. (2016). Budget reform and political reform: Conclusions from six cities. Local Government Management: Current Issues and Best Practices: Current Issues and Best Practices.