Reference no: EM133173463

SITXFIN004 Prepare and monitor budgets

Assessment task: Worksheets

TASK A: Prepare Budget Information

Q1: The role of budgets is to assist and support an organisation's operations. Explain how they do this. Give two examples.

Q2: What are the three different types of ‘year' used when preparing budgets? List their names and appropriate time period.

Q3: What is a fixed (static) budget?

Q4: What is a master budget and what is its purpose?

Q5: What is a revenue statement budget (also known as the ‘profit and loss budget' or ‘income statement budget')?

Q6: List five different sources of data that is used when preparing budgets.

Q7: Describe each of the different categories of expenses. Give one example of each category.

Q8: Briefly describe the role of a sales budget.

Q9: What are two examples of information used to prepare a labour budget?

Q10: What is a master budget?

Q11: How does a cash flow budget aid business planning?

Q12: List three external factors that can affect budget planning.

Q13: Chose one external factor listed in your response to question 12 and briefly explain how it affects budget planning.

Q14: List three internal factors that can affect budget planning.

Q15: Chose one internal factor listed in your response to question 14 and briefly explain how it affects budget planning.

Q16: What level of involvement should colleagues have in the budget planning process?

TASK B: PREPARE BUDGET

Q17: You're drafting an incremental budget. What type of information would you look for when analysing previous figures and variances? List three examples.

Q18: You are preparing a draft sales budget. List the five basic steps you would follow.

Q19: A business sells 3,685 dolphin tour passes per year. It's one of their bestselling tours and management expects sales to remain strong. They believe sales will increase 10% next year. How many potential tour passes will be sold next year?

Q20: A business wants to calculate food revenue for the month of July based on 75 seats and an average seat turnover rate of 0.75. The average spend per customer is $13.90. What is the total food sales for the 31-day budget period?

Q21: Last month a business spent $23,379 on food purchases and generated $73,059 revenue. Calculate the food cost percentage.

Q22: To calculate food expenditure you need to determine the cost of a 1 kg bag of flour. The kitchen purchases 20 kg bags for $48.00 each. How much does it cost for 1 kg?

Q23: What are six costs, other than gross wages or salaries, which should be included when calculating a labour budget?

Q24: List three factors that can affect cash flow in a business.

Q25: Why is it important to reflect organisational objectives within the draft budget?

Q26: List two different presentation styles you can use to present options and recommendations to colleagues.

Q27: List two things to keep in mind when deciding which presentation style to use.

Q28: You've prepared a draft budget based on your analysis of all available information. What action is required next?

Q29: Why is circulating a written draft budget an effective method of presenting recommendations to the management team?

TASK C: FINALISE BUDGET

Q30: Why is it important to discuss and negotiate outcomes amongst your team prior to finalising the budget?

Q31: Who is usually responsible for incorporating any modifications to the budget?

Q32: How can you ensure the final budget is completed within designated timelines.

Q33: What must you do once the budget is finalised?

Q34: List three examples of the type of information you should provide to colleagues after finalising the budget.

TASK D: MONITOR AND REVIEW BUDGET

Q35: What are the five steps followed when monitoring and reviewing budgets.

Q36: List four questions a manager should ask when assessing their budget performance.

Q37: A business forecasted $250,000 sales but actual sales for the period were $235,200. What is the variance and variance percentage?

Q38: What are financial commitments? Where are they recorded?

Q39: Are the following deviations favourable or unfavourable results?

Q40: A business's laundry costs are $1,450 below budget. What is a possible cause for this deviation?

Q41: A hotel's average room rate is 15% above budget. List two possible causes for this deviation.

Q42: List three things you need to assess when deciding if a deviation should be investigated further.

Q43: Part of the budget process is reporting on performance, the results from the various budgets used, and analysing the information you've gained from them. List four examples of the type of financial reports you need to prepare after reviewing budget performance.

Q44: List three internal or external factors that could change over the budget period, resulting in the need to adjust the budget.

Q45: What information should you collect and record for the future?

Q46: Why is it important to collect and record budget performance reports?

Q47: Briefly explain how the features and functions of accounting software programs assist you in managing budgets.