Prepare a master budget for the firm for the coming year

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Reference no: EM132235933

ASSESSMENT

Report: Manage budgets and forecasts

Case study - Alfa Tiles Pty Ltd

Alfa Tiles Pty Ltd is a small trading firm that manufactures and sells ceramic frames. The accounting firm you are working for has been approached by Alfa Tiles Pty Ltd to review the budgets they are working within the current year and prepare a master budget for the firm for the coming year.

For the purpose of this assessment, the date today is 1 January 20xx, beginning of the third quarter of the current year.

Objectives:

1- Perfect customer services
2- High professional work environment for staff
3- To be able to supply all quality products to Australia wide and New Zealand.
4- To develop and maintain internal and external workplace relationship networks
5- To implement and use new technologies for better and efficient quality services
6- To provide healthy, professional, fun and successful workplace environment for all staff
7- To comply and follow Australian regulations, codes of standards, government buddies, ethics, codes of conducts and etc
8- Comply with AASB for accurate and reliable financial reports
9- Follow codes of standards to keep all financial documents in a safe and secure place for day to day activities
10- Develop and implement new technologies to improve communication strategies and facilities

Procedures:
Please carefully read each question and provide your report below;

Part of the requirements of this task is for you to demonstrate your ability to work within set timelines. To document your successful completion of this assessment, follow the steps outlined attached:

Comparing the past two quarters, the business manager noticed that even though the sales in the current year are much higher than last year's, they were still unable to meet this year's quarterly targets. To investigate this further, you were also provided with last year's sales record:

Details that must be included in the report:

ASSESSMENT QUESTIONS

Part A
Executive Summary
• A summary of your report and what you will be submitting in the following pages (Min 60 words)
• The top-line findings (Min 4 bullet points)
• The types of information you will need to gather to make the final decision. (including a summary explanation why each piece of information is necessary, 45 words each - at least 4 types of information)

Part B

Calculations and Analysis

1) Complete for the following information:
a. Corrected sales budget for Q3, Q4, Q1+1 and Q2+1 in accordance with details below:

A detailed guide is provided below to assist you in completing this task successfully:
• Updating the sales budget
• Using the actual sales from the previous year, at the actual sales from Q1 and Q2 of the current year, create a sales budget for the next financial year
• Create a sales budget for the next financial year, taking into account the variances you have calculated in step 1. It is Alfa Tiles Pty. Ltd.'s policy to compute for the sales budget as quarterly averages of actual sales from the previous financial year, but for the variances to be accounted on a monthly basis
• Assume that the unit selling price remains the same throughout the financial year.
• Compute the average sales budget per quarter. Round the expected sales to the nearest unit. Round all values computed to the nearest dollar.
• Use the relevant table provided.

b. Provided below is the expected and actual sales report for the financial year Quarter 1 (20xx) to Quarter 4 (20xx + 1).
Monitor budget outcomes by calculating the budget variances for each month:

c. Corrected Production budget for the current year

Updating the production budget
• Using the sales budget you created for the next financial year, create the corresponding production budget.
• Set the desired ending inventory as expected sales plus 500 units.
• Compute the production budget per quarter.
• Round the number of sales and production items to the nearest unit.
• Use the relevant table provided
• For your guidance, refer to the following definitions:
- Beginning inventory: final inventory from the previous month
- Expected unit sales: Determined from the updated sales budget
- Expected ending inventory: beginning inventory less the expected sales
- Desired ending inventory: expected sales plus 500 units
- Total production required: units required to be produced to meet desired ending inventory
- Final inventory: total units ready for the next month
Quarter total: total of units that need to be produced within the quarter

2) Expenses budget for the current year (20xx)

3) Schedule of cash receipts:
Complete the schedule of cash receipts according to the information provided on the previous page. Guidance: as per the company policies and procedures, receipt/collection of sales are scheduled as follows:
- You need to extract sales data from corrected sales budget 20xx+1.
- 50% to be received/collected within 1 month after the sale
- 40% to be received/collected within 2 months after the sale
- 10% to be received/collected within 3 months after the sale

4) Complete the cash budget template below based on the updated budget estimate and schedule of receipts:

5) Document the dates you have completed the following tasks.

Part C - Main part

1. Discuss how you make sure that all sale budget and actual documents (trends, figures, budget variances, financial statements etc.) are accurate, valid, and reliable and comply with statutory requirements and standard financial reporting principles? (documentation process,80 words)
2. Explain and determine what are weaknesses and strengths among three sale figures? (min 2, 40 words each)

3. Briefly explain why using the average of the previous year's total sales is not an accurate method to determine monthly and/or quarterly sales budgets? (min 80 words)

4. Identify financial risks when creating forecast estimates. For each of the risk, you identify, describe protection strategies you can implement to address these risks. (min 2,40 words each)

5. Provide one policy that directly emphasises and improves accuracy of financial budgets and forecasts? (40 words)

6. Provide one policy that identifies financial risks and one protection strategy in budgets and forecasts processing? (30 words each)

7. Explain how you analyse and monitor budget variances in order to share valid and reliable documents and discuss reports with stakeholders? (min 80 words)

Part D - Conclusion
Describe your evaluation and report your professional opinions budget development in aligned with Alfa Tiles Pty Ltd.'sfinancial budgets and objectives. (Min 70 words)

Part E - Recommendations
Provide financial evaluation and options to Alfa Tiles Pty Ltd by mentioning 4 strength areas of financial performance and also 4 weakness areas that could be improved. (Min 70 words)

Part F - Workplace Evidence
Provide evidences of your workplace such as payslips, ID card, emails or pictures, etc.

Attachment:- Manage budget forecasts Final Assessment.rar

Reference no: EM132235933

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Reviews

len2235933

2/16/2019 4:35:12 AM

PART D –Conclusion • Did the learner describe your evaluation and report your professional opinions budget development in aligned with Alfa Tiles Pty Ltd.’s financial budgets and objectives. (Min 70 words) Part E – Recommendations • Did the learner provide financial evaluation and options to Alfa Tiles Pty Ltd by mentioning 4 strength areas of financial performance and also 4 weakness areas that could be improved? (Min 70 words) Part F – Workplace Evidence • Did the learner provide any workplace evidence such as picture, letter, email, etc.

len2235933

2/16/2019 4:35:07 AM

PART C – Main Body 1. Did the learner discuss how you make sure that all sale budget and actual documents (trends, figures, budget variances, financial statements etc.) are accurate, valid, and reliable and comply with statutory requirements and standard financial reporting principles? (documentation process,80 words) 2. Did the learner explain and determine what are weaknesses and strengths among three sale figures? (min 2, 40 words each) 3. Did the learner briefly explain why using the average of the previous year’s total sales is not an accurate method to determine monthly and/or quarterly sales budgets? (min 80 words) 4. Did the learner identify financial risks when creating forecast estimates? For each of the risk, you identify, describe protection strategies you can implement to address these risks. (min 2,40 words each) 5. Did the learner provide one policy that directly emphasises and improves accuracy of financial budgets and forecasts? (40 words)

len2235933

2/16/2019 4:34:42 AM

PART A – Executive Summary • A summary of your report and what you will be submitting in the following pages (min 60 words) • The top-line findings ( min 5 bullet points) • The types of information you will need to gather for the owner to make the final decision. (4 types, 45 words each) PART B - Calculations and Analysis 1. a) Corrected sales budget for Q3, Q4, Q1+1 and Q2+1 1. b) budget variances calculation 1. c) Corrected Production budget for the current year 2. Schedule of cash receipts 3. cash budget 4. Documentation process

len2235933

2/16/2019 4:34:28 AM

Assessor and student must read this carefully before assessment. A 75% demonstrated competence in the answers is the benchmark only and students & assessors must note that professionally critical aspects/concepts must be included (e.g. prepare, document and present budgets and forecasting estimates, statistical analysis and measures of variance, monitor budget outcomes periodically). All parts (criteria) in the marking guide must be completed successfully for the student to achieve competence in this unit.

len2235933

2/16/2019 4:34:16 AM

Important: Your assessment must contain this coversheet and your own coversheet (for your “report”) Your answers & assessment submission must professional in style (Business), content and format. Maximum font size 11 points: Font Arial or Times New Roman; single spacing; clear paragraphswith appropriate punctuation, spellchecking and final submission will need to be proof-read. (i.e. few missing words or typo’s) In particular: - Use clear, non-discriminatory language - Avoid the use of jargon - Write clearly using plain English - Consider your target audience - Ensure that your responses meet the needs of the target audience (in this case your trainer or assessor). All of your work must be original.

len2235933

2/16/2019 4:34:06 AM

This assessment must be based on where you work (or have worked most recently). This Assessment is designed to test the knowledge that you have acquired throughout the unit. Use the following tips to help you answer the questions: Read each question carefully. Check with your trainer or assessor if you are not sure what the question is asking. HINT: Use these questions as subheadings to create a business style report to answer your assessment Your response to each question should aim to provide enough information to answer the question. In most cases, this can be done with just a few paragraphs.

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