Prepare a selling expense budget for the month of february

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Leadership and Management Financial Management Assignment

Purpose of the Assessment - The purpose of this assessment is to assess the student in the following learning outcomes:

  • Plan financial management approaches
  • Implement financial management approaches
  • Monitor and control finances
  • Review and evaluate financial management processes

Task 1:  Give some examples for the following costs:

  • Direct cost
  • Indirect cost
  • Fixed cost
  • Variable cost
  • Step cost/Semi variable cost

Task 2: Classifying costs and Monitoring process for actual expenditure:

Part a:

A company incurs the following costs (as shown under 'Workings') during a manufacturing process. Identify them with one of the cost elements (direct material, direct labour or other costs) by ticking the appropriate column. Also indicate by a tick whether it is a direct or an indirect cost.

Part b:

i) Complete the following variance report.











Product X


20 000


26 000

Product Y


18 000


17 600

Product Z


40 000


36 100


ii) Complete the missing figures in the following cost of production report for product X.

Cost of production report

Budget $

Actual $

Variance $

Direct material

8 950


Direct labour

17 900

18 260

Factory overhead

6 420


Part c:

From the information given, calculate and write down all possible variances (units or dollar amounts as applicable) in the variance columns stating whether they are favourable (F) or unfavourable (U).



Variance (Total)



Sales - Product A




Sales - Product B


1 200

1 180

Sales - Product C


1 500

1 650

Sales - Product A




Sales - Product B




Sales - Product C




Production - Product A



1 100

Production - Product B


1 200

1 320

Production - Product C


1 800

1 780

Raw material X


5 700

6 875

Raw material Y


10 500

10 230

Raw material Z


7 200

7 476

Task 3a: Dissemination of budgets and financial plans

List the ways by which dissemination of budget and action requirements takes place.

Task 3b: Give some examples of budgets, and explain which parties these should be discussed with.

Case Study - Task 4

Performance indicators

Rural fire services consist of a number of volunteers who are drawn from the local communities. These volunteers are trained by the State's fire brigade.  They are called upon to assist the permanent staff in case of emergency.  Depending on the training and their capability they are provided with protective clothing where the well trained volunteers get a full set of uniform and the beginners get an identifying cap. These volunteers also help in fund raising activities.  The money collected goes into funding the unit.

Performance indicators linked to the activities of an organisation are necessary for the organisation to assess its performance.  The performance indicators used by commercial organisations are motivated by the need to make a profit for them to survive and provide returns to the investors. The performance indicators for not-for-profit organisations are somewhat different to those of commercial organisations.  Not-for-profit organisations are those organisations that provide services for organisation members or for other people but not interested in profits.  This is mainly due to the fact that these organisations survive on grants and donations.  Examples of such organisation include charities, churches and political parties. Some not-for-profit organisations are substantial organisations such as the International Red Cross that has a large budget and complex operations while others such as local sports teams are run for a local community.

What might be some of the performance indicators used to assess the performance of such units?

You might investigate such a unit or look at other not-for-profit groups and review how they go about measuring performance.

Task 5: Performance Indicators

Explain whether the items in the 'Workings' area are financial or non-financial performance indicators.

Task 6: Classification of work description

Identify the following as Trading (T), Manufacturing (M) or service (S) business.

(a) a grocery store                    (  )

(b) a furniture wholesaler           (  )

(c) a legal firm                          (  )

(d) a plumber                            (  )

(e) a dentist                              (  )

(f) a bakery                              (  )

(g) a food processing factory      (  )

(h) a restaurant                         (  )

(i) a super market                      (  )

(j) a doctor's surgery                  (  )

(k) a shoe store                         (  )

Task 7: Fees Budget

The Suburat Medical Centre, located in an affluent suburb, provides a 24-hour medical service to the residents. A recently recruited employee has been asked to help the management with the preparation of a fees budget for January 20X1and is provided with the following information:

  • Forty-five per cent of patients pay in cash when services are performed, and those insured claim refunds from their medical funds. The fee charged to the patients is $25.
  • Fifty-five per cent of the patients are accepted on bulk billing, where the fee charged is $19.
  • The number of patients expected for consultation/treatment in January 20X1 is 1700.

Show how the fees budget will be prepared.

Task 8: Sales Budget and production budget

The projected sales in units for Parker and Company for the month of January 20XX is 12000. The inventory of finished goods on 1 January 20XX was 6,000. The company expects the ending inventory for January to be 7000 units and expects to maintain it at that level for the coming months. The sales for February and March are each expected to increase by 10% over the previous month. Prepare a production units budget for these three months.

Task 9: Expense budget

Prepare a selling expense budget for the month of February 20XX for Dajan & Co. The sales for February are expected to be $120000. The bases to be used for budget purposes are as follows:

  • Annual fixed expenses are allocated equally to each month.
  • Sales staff salaries are equal to 4% of sales.
  • Depreciation of sales vehicles is an amount of $18000 per annum.
  • Sales staff insurance is 2.5% of total sales staff salaries.
  • The advertising budget is currently $19200 per annum.
  • Sales vehicle maintenance costs the organisation 2% of sales revenue.
  • Freight out is calculated at 0.65% of revenue.

Task 10: Preparing P & L and Balance sheet using Spreadsheet

Complete the following P & L and Balance sheet.

P & L Statement IBC Pty Ltd July 1, 2013 to June 30, 2014

Gross sales


Les: sales returns and allowances


A. Total Business Income

Cost of Goods Sold:

Beginning Inventory, July 2012



Direct material


Direct labour


Factory overhead



Closing inventory, June 2013


B. Cost of Goods Sold

C. Gross Profit (A-B)




Utility bills




Office supplies








Travel and entertainment


Dues and subscriptions


Interest paid


Commission paid


Owner's drawings


D. Total expenses

Net Profit (C-D)

Balance Sheet IBC Pty Ltd July 1, 2013 to June 30, 2014




Accounts Receivable








Plant & equipment


Less: Accumulated depreciation




A. Total Assets


Accounts payable


Bank overdraft


Short term loans




B. Total liabilities

C. Net Assets (A-B)

Owner's equity

Opening equity


Retained profit


D. Total owner's equity

Task 11: Prepare a Profit & Loss Statement and a Balance Sheet from the following Trial Balance.

Trial Balance of Marco's Café As at 30 June 2014

Account Name

Debit $


Cash at bank

20 000

Accounts Receivable

134 000


40 000


3 000

Plant and equipment (P & E)

430 000

Accumulated Depreciation-(P & E)

(put this amount as negative under asset)

20 000

Accounts Payable

71 000

Accrued Expense(Liability)

3 000

Loan from bank

29 000

GST payable

10 000


100 000

Retained Profit(OE)

100 000


10 000

Long Term Loan

150 000


550 000


320 000


15 000


41 000


27 000

Interest Expense

13 000

1 043 000

1 043 000

Task 12: Sources of Finance

You are owner of a manufacturing company. Due to increased competition in the marker you are planning to open a new product line. This involves a certain amount of investments and requires capital. You are planning to approach financial institutions to apply for financing. What are the different sources you can manage finance for your business?

Task 13: Clarification of budgets and financial plans:

In a retail environment where floor staff may have scope to vary the price of products sold what information might the store management need to pass to various sales work groups in respect to issues such as cost and discounts that might impact on sales budgets being achieved?

Task 14: Financial plans and negotiation for changes

What are the potentially positive impacts of consultation and agreement on budget goals between management and staff responsible for achieving required budget goals in respect tonsuring budget goals are met?

Task 15: Risk management and Prepare Contingency Plan

Part a: What is risk management? Explain the various methods available for treating risk.

Part b: What is involved in selecting the appropriate contingency plan?

Task 16: Risk Management

Can risks be avoided in an organisation? Explain your answer.

Task 17: Succession planning

Describe the steps involved in 'Succession Planning'.

Task 18: GST Calculations

John is the owner of a fish and chips shop in Parramatta. His total sale for the month of February was $24,000 including GST. His purchase was $18,000 for the same month. Calculate the following.

(i) GST received

(ii) GST paid

(iii) Net GST payable

Task 19: GST and Cash Flow Statement

A company forecasts the following transactions during the next financial year which will affect its cash flow. (All ATO dues and ATO credits are expected to be settled during the year.)

Prepare a budgeted cash flow statement assuming that the opening bank balance was $30,200.

Task 20: Preparing Sales Budget

Gardening tools Pty Ltd manufacture and sell lawn mower and water pump. The production cost is as follows:

Lawn mower: $278

Water pump: $190

The company sells the products by adding a mark-up of 120% on lawn mower and 150% on water pump. Due to increased competition, the company has decided not to increase the unit sales price in next year's budget. The products are sold in Bunning warehouse and Your local Hardware Store. Actual sale (in no. of units) for both the products in those outlets from January to March 2013 is as follows:






Bunning Warehouse

Lawn mower





Water pump






Your local Hardware Store

Lawn mower





Water pump





For January to March 2014, Gardening tools Pty Ltd is estimating that the overall sales for their products will increase in Bunning warehouse but may decrease in Yourlocal Hardware Store. The marketing and sales team is making the following forecast:

a. Sales for both the product will increase by 15% over same period last year in Bunning warehouse in February and March. But due to late summer, only in January it will increase by 6% over last year sales in the same outlet.

b. Your local Hardware Store is facing significant competition from Bunning due to their aggressive pricing policy and losing customers. Therefore the sales team is estimating a 5% decrease in sales for lawn mower and 3% decrease in water pump sale in that outlet comparing to same period last year.

Based on the above facts the marketing team has requested you to calculate the estimated sales budget (in $) for January to March 2014 for both the product and area wise.

Task 21: Operating Expenses Budget

Parker and Company expects to spend $20,000 on general administration expenses in the month of January 20XX. In February, these will be 90% of the January expenses; in March, 105% of January's expenses. The selling and distribution expenses total is expected to be 5%, and financial expenses 1%, of each month's sales.

Prepare the operating expenses budget for the three months January to March.

Sales amount are in $150,000, $175,000 and $180,000 in January, February and March respectively.

Read the following statements and write if you agree or disagree with the statements. Your analysis must be supported by argument.

Cash flow management means managing the cash moving in and out of your business.

1. Cash outflows usually occur after cash inflows.

2. Two important benefits of cash flow management are to identify future cash flow problems and to reduce the amount of time between inflows and outflows.

3. Three of the following are some of the most important components of cash flow. Which one is not?

A. Stock

B. Trade creditors

C. Fixed assets

D. Trade debtors

4. Too much stock may negatively affect your sales ability and your relationship with customers.

Task 22: Part a: Accounts Receivable Collection Schedule and Cash Flow Statement.

Part b: Create an EXCEL file and complete the calculations through using formula.

Stock & Co., a manufacturing company, need to produce a cash flow budget as part of an overdraft application with their bank. The following are some of Stock's budgeted figures:

Credit sales $

Purchases $

Wages $


39 000

26 975

3 185


41 600

31 200

3 900


23 400

52 650

3 600


37 700

53 300

3 470


27 300

58 175

3 380

Budgeted cash at bank on 1 January is $5590.

Though credit terms of sale are payment by the end of the month following the month of supply, Stock & Co. can expect half of the sales to be paid on the due date, with the other half being paid during the following month. Creditors are paid during the month following the month of supply. Wages are paid in the month they are owed.

Utilising the following tables for format, prepare a cash budget for the quarter 1 January to 31 March 20XX.

What went wrong?

What are the consequences of those wrongs?

What managerial actions can be taken to rectify the errors?

What organisational protocols should be followed for reporting if loss is inevitable?

What support can be provided to the team members to ensure that proper management of finances is in action?

Task 23: Asset Management - Managerial Decisions

You are the owner of a small business. In the new financial year you are planning for business expansion. As part of that you are required to acquire new equipment and IT equipment to increase your production level. You have approached this issue to your Chief Financial Officer (CFO). CFO advised that there are three options available to acquire new equipment: Buying, leasing or hire purchase. All have some advantages along with disadvantages. Identify the advantage and disadvantages of them and recommend which one is preferable if you are to buy new IT equipment.

Task 24: Cash flow analysis - Managerial Decision: Metropolitan Furniture

Peter works in the accounts unit of the Metropolitan Furniture Manufacturing.  He was asked to prepare a prop101028osed budget for the forthcoming quarter.  He consults with the sales manager and finds that:

Estimated sales are as follows:

February            :               $265,000

March                :               $255,000

April                  :               $290,000

May                   :               $250,000

June                  :               $280,000

In consultation with the production manager he estimates that the cost of goods sold is to be budgeted at 40% of the sales figure.  The salaries are expected to be $75,000 per month. When sales exceed $270,000 in any one month, the sales team is entitled to an additional 4% commission on the excess sales over this figure. Other expenses are estimated to be $25,000 per month.

The owner of the organisation is concerned about the cash flow which was not thought of before. The owner is of the opinion that the collection of cash from sales is slow and this could possibly lead to cash flow problems to the organisation.  As Peter has never forecasted cash flow before he sets about collecting information on this.

Peter estimates that 70% of the total sales are going to be cash sales where the bill is settled when the goods are purchased or delivered.  20% of the month's sales) settle the accounts owed in the month following sales.  Others (i.e. 10% of the month's sales) settle in the month after.

Additional information for Cash Flow Statement:

The organisation gets a month's credit on its purchases.  That is, the accounts for the purchases (COGS) made in one month is settled in the following month. 

All salaries are paid in the month as they are incurred.

The additional commission is paid in the month after the month in which it was earned. 

Other expenses are paid in the month they were incurred.

The bank balance at the beginning of the first month is estimated to be $30 000.


1. Show the profit and loss calculations for April, May and June of operations.

2. Show the cash flow projection calculations for April, May and June.

3. Show amended figures if sales were to increase by 10% in each month and the cost of goods fell from 40% to 35% through a better long-term purchasing agreement with the supplier.

4. Does Peter need to suggest any contingency plan at this stage?

Task 25: Constructing a Cash Flow Statement

Constructing a Cash flow statement:

Calculate the total cash inflows and cash outflows and the net cash position at the end of December from the following information:

Use the space provided and shows all line items.

XYZ Pty Ltd. December 2014


Amount ($)

Cash receipts from customers


Cash paid to suppliers and employees


Interest paid


Income tax paid


Purchase of Subsidiary X, net of cash acquired


Purchase of property, plant and equipment


Proceeds from sale of equipment


Interest received


Dividends received


Proceeds from issue of share capital


Proceeds from long-term borrowings


Payment of finance lease liabilities


Dividends paid


Cash and cash equivalents at beginning of period


Task 26: General knowledge: Manage your business cash flow

Read the following statements and write if you agree or disagree with the statements. Your analysis must be supported by argument.

1. The purpose of cash flow planning is to ensure that the cash balance is enough to meet current and future financial requirements.

2. When preparing a cash flow budget you will need to:

A. estimate  cash outflows for the period.

B. estimate cash inflows for the period.

C. estimate the future cash position of the business.

D. do all of the above.

3. The cash flow equation is as follows.

Beginning cash balance + estimated sales - estimated purchases = ending cash balance

4. The sales forecast is not important in the preparation of the cash flow budget.

5. In a retail business the largest cash outflow is generally the cost of goods to be sold?

6. After the financial plan is developed and implemented, it is important to communicate and distribute it to the relevant people to satisfy the legal requirements. List some examples of relevant people. Explain why it is critical.

7. "It is critical to obtain accountant/financial planner's advice to profitably operate and extend the business in accordance with the business plan" - Explain


Required: Prepare the Pretty Cash Book for the month of January by:

1. Recording the establishment of the petty cash float in the Petty Cash Book

2. Recording the payment vouchers in the Petty Cash Book

3. Balancing the Petty Cash Book on the dates indicated

4. Recording the reimbursement cheques in the Petty Cash Book.

Attachment:- Assignment File.rar

Verified Expert

The assignment relates to financial accounting as well as cost accounting. The concepts of the cost elements have been used. Furteher, preparation of profit and loss account, balance sheet and cash flow statement as per the requirement of the question has been completely done.

Reference no: EM131522198



4/19/2018 5:15:31 AM

Hello there. I have already paid for this document. When can I expect to receive the answers? Thank you very much. Hello there. Thank you very much for the answers. You’ve done a great job! I was just wondering whether the answers are original or you send the same answers to all students who require them for this particular assessment? Thank you very much for the plagiarism report. My doubt was clear and I got my unique solution. Thank you very much.


6/8/2017 2:26:14 AM

Australian student, need it as per the guidelines. Need all the tasks to be done as per the requirements. Each assessment component is recorded as either Satisfactory (S) or Not Satisfactory (NS). A student can only achieve competence when all assessment components listed under Purpose of the assessment section are Satisfactory. Your trainer will give you feedback after the completion of each assessment. A student who is assessed as NS (Not Satisfactory) is eligible for re-assessment.


6/8/2017 2:26:02 AM

Please read the following instructions carefully: The assessment is to be completed according to the instructions given by your assessor. Feedback on each task will be provided to enable you to determine how your work could be improved. You will be provided with feedback on your work within 2 weeks of the assessment due date. All other feedbacks will be provided by the end of the term. Should you not answer the questions correctly, you will be given feedback on the results and your gaps in knowledge. You will be given another opportunity to demonstrate your knowledge and skills to be deemed competent for this unit of competency. If you are not sure about any aspects of this assessment, please ask for clarification from your assessor. Please refer to the College re-assessment and re-sit policy for more information.

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