Budget Control
COURSE CODE : BCO 322 COURSE NAME: BUDGETING & CONTROL Task brief & rubrics
Task
This is Final timed Assignment:
· Individual task
· You must answer all the questions.
· When solving problems, you must clearly explain all the steps you are doing, and why are you making those steps.
· Show all your workings, a numeric answer is not enough.
· You should submit a document in Excel format showing all calculations.
Formalities:
· Use one page per answer.
· Cover, Table of Contents, References and Appendix are excluded of the total wordcount.
· Font: Arial 12,5 pts.
· Text alignment: Justified.
Submission: Week (13) – Via Moodle (Turnitin). Sunday May 9th 23:59.
Weight: This task is a 40% of your total grade for this subject.
It assesses the following learning outcomes:
· Develop an understanding and working knowledge of real-world budget issues.
· Prepare cash budgets and predicted a pro forma income statement and a pro forma balance sheet.
· Cash Budget
· Flexible budgeting
· Analysis of variances
Assignment:
1.- You have the following monthly budget from a company:
|
|
Oct |
Nov |
Dec |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
|
Direct sales |
23.000 |
24.000 |
25.000 |
24.589 |
15.889 |
115.896 |
115.896 |
115.896 |
115.896 |
|
Sales to distributors |
49.000 |
48.000 |
25.963 |
25.412 |
2.526 |
125.678 |
125.678 |
125.678 |
125.678 |
|
Purchases to local suppliers |
17.280 |
17.280 |
12.231 |
12.000 |
4.420 |
57.978 |
57.978 |
57.978 |
57.978 |
|
Purchases from imports |
25.920 |
25.920 |
18.347 |
18.000 |
6.629 |
86.967 |
86.967 |
86.967 |
86.967 |
|
Direct personnel costs |
10.000 |
10.000 |
10.000 |
10.000 |
10.000 |
10.000 |
10.000 |
10.000 |
10.000 |
|
Indirect personnel costs |
5.000 |
5.000 |
5.000 |
5.000 |
5.000 |
5.000 |
5.000 |
5.000 |
5.000 |
|
Sales department |
10.000 |
10.000 |
10.000 |
10.000 |
10.000 |
10.000 |
10.000 |
10.000 |
10.000 |
|
Sales agent |
2.160 |
2.160 |
1.529 |
1.500 |
552 |
7.247 |
7.247 |
7.247 |
7.247 |
|
Administration |
2.000 |
2.000 |
2.000 |
2.000 |
2.000 |
2.000 |
2.000 |
2.000 |
2.000 |
|
Depreciation |
200 |
200 |
200 |
200 |
200 |
200 |
200 |
200 |
200 |
|
Local non income Taxes |
|
|
225 |
|
|
225 |
|
|
225 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
-560 |
-560 |
-8.569 |
-8.700 |
-20.386 |
61.957 |
62.182 |
62.182 |
61.957 |
Prepare a cash forecast considering the following:
Direct sales paid 30 days
Sales to distributors 50% cash, 25% after 30 days, 25% after 60 days.
Local suppliers paid 60 days, import suppliers paid 30 days.
Personnel cost (Direct personnel cost + Indirect personnel cost +Sales department + Administration) and taxes, are paid at the end of the month.
Commissions from sales agent (5%) are paid after receiving full amount from the customers (Direct customers and distributors).
Starting cash January 1st is 5.000€
At the end of December, the company has a loan of 20.000€. The company pays interest every month, based on an annual interest of 6%, (0.5% per month), calculated in base of the loan balance of the previous month.
Their credit facility has a maximum amount of 300.000€
The company wants to hold a minimum cash balance of 20.000€
Prepare a cash planning.
The company issued Bonds 5 years ago, and they have to pay 500.000€ by June 30th.
Will they be able to pay in time?
What is the final cash balance by June 30th.?
(65 points)
2.- Company Abanderado Inc. shows the following data:
|
|
Budget |
Actual |
|
Units |
43.200 |
114.968 |
|
Sales |
864.000 |
2.069.424 |
|
COGS |
518.400 |
1.241.654 |
|
Margin 1 |
345.600 |
827.770 |
|
|
|
|
|
Direct Labor |
120.000 |
120.000 |
|
Indirect labor |
60.000 |
60.000 |
|
depreciation |
2.400 |
2.400 |
|
Margin 2 |
163.200 |
645.370 |
|
|
|
|
|
Sales and marketing |
120.000 |
120.000 |
|
Commissions |
25.920 |
62.083 |
|
Administration |
24.000 |
24.000 |
|
Local taxes |
900 |
900 |
|
Operating income |
-7.620 |
438.387 |
You are requested to find deviations between actual and budget for all income statement accounts.
Show deviations in % over budget.(5 points)
Show all Income statement lines as percentage of Sales.(5 points)
Explain the deviation in sales, and split it between volume variance and price variance.(15 points)
Show income statement per unit for both Budget and actual. (5 points)
Give an explanation for the deviations of the company.(5 points).
Rubrics
|
|
Descriptor |
|
9-10 |
The student demonstrates an excellent understanding of the concepts. |
|
8-8.9 |
The student demonstrates a good understanding of the concepts. |
|
7-7.9 |
The student demonstrates a fair understanding of the concepts. |
|
6-6.9 |
The student demonstrates some, but insufficient understanding of the concepts. |
|
3-5.9 |
The student demonstrates insufficient understanding of the concepts. They may mention some relevant ideas or concepts, although it is clear that the relationship between them is not understood by the student. |
|
1-2.9 |
The student demonstrates insufficient understanding of the concepts and does not mention any relevant ideas or concepts. |
|
0 |
The student leaves the question blank or cheats. |