Reference no: EM131739270
Purpose: This assignments will assess knowledge of qualitative factors relating to differential analysis. The assignment is related to CLO5: Identify, construct, and appraise budgets for effective management. Requirement: After reading all budgeting resources and viewing the videos, answer the following question 4 questions. If a narrative is required, create answers in your own words, using complete sentence structure and grammar. Please use citations if applicable. Part I: The General Manager 1. Your budget analysis is out on FMLA and as a general manager, you need to prepare a quarterly budget for your company. You are budgeting a sales price of $110 per unit and they estimate they will sell 150 units in October and unit sales will increase by 5% each month after that. How many units are estimated to be sold in October, November, and December? (Round to nearest whole units and nearest whole cent.) Sales in Units Sales in Dollars October November December Total for the quarter 2. Using the Sales from above you will now estimate the selling expense budget for the quarter. The sales manager makes $50,000 per year plus a 10% commission from all sales made during the month. Complete the chart below to determine the selling expense for each month and the total for the quarter. (Round your answers to the nearest whole cent.) October November December Total Sales Commission (10%) Manager Salary ($50,000/yr) Total Selling Expenses Part II: The Consultant 3. You are reviewing a flexible budget report for a company. Indicate whether each variance in ABC Contracting’s Flexible Budget Report below is either Favorable or Unfavorable. (24,000 units) (24,000 units) Flexible Budget Actual Results Variance Favorable or Unfavorable Sales $960,000 $972,000 $12,000 Variable Costs 192,000 240,000 48,000 Contribution Margin 768,000 732,000 36,000 Fixed Costs 500,000 490,000 10,000 Net Income $268,000 $242,000 $26,000 As a consultant, you need to explain to ABC Contracting variance concepts. What does it mean when a variance is described as a favorable variance and as an unfavorable variance? 4. You are a consultant for a start-up company, called Cycle Lovers Corporation, and it does not want to create a budget for the next fiscal year. The chief executive officer (CEO) of Cycle Lovers Corporation remarked to a colleague, "I do not understand why other companies waste so much time in the budgeting process. I set our company goals, and everyone strives to meet them. What is wrong with that approach?" Write a memorandum to the CEO stating whether you agree with this comment or not and explain why. The heading of the memorandum should contain the date, to whom it is written, from whom, and the subject matter.