Prepare operational budgets

Assessment ToolFNSACC402 Prepare operational budgetsBSB50215Diploma of BusinessVersion 3.0March 2016Level 2, 25 George Street, Parramatta, NSW 2150Phone: +61 2 9633 1222 Fax: +61 2 9633 1888Email: Web: 17 120 701 911 | RTO ID 91630 | CRICOS ID 03173K FNSACC402, Version 3- March 2016Page 2of 22Table of ContentsPre-assessment Checklist 3Assessment Submission SheetError! Bookmark not defined.Assessment Information..5Portfolio Requirements 6Assessment Activity 1- Knowledge Based Questions and Practical Problems .7Assessment Activity 2 Case study- Business Scenario 14Assessment activity 3: A presentation (1.3) .. 19Assessor Marking and Feedback Form: Presentation Checklist. 20Assessor Marking and Feedback Form: Assessment Activities 21FNSACC402, Version 3- March 2016Page 3 of 22Pre-assessment Checklist Candidates name:Units of competency: FNSACC402 Prepare operational budgetsTrainer/Assessor:Date:Checklist Comments Talked to the candidate about the purpose of the assessment. Discussed the assessment environment and the process coveringwhen the assessment will occur, where the assessment will occur, whowill assess the candidate, and the feedback process. Printed the unit outline and explained the unit of competencyincluding each element, performance criteria, foundation skill,performance evidence, and knowledge evidence that the candidate willbe assessed on. Discussed the various methods of assessment, assessmentinstruments, submission requirements and the due date. Discussed what resources are required to successfully complete thisassessment. Discussed what performance level is required for each assessmenttask. Organised the necessary arrangements to meet the assessmentconditions essential for the candidate to carry out each assessment task. Ensured that the candidate read and understood the StudentAssessment Handbook involving following concepts: Authenticity of candidates work Re-submission, re-assessment and study plan policy/procedures Appeals process Regulatory information Confidentiality procedures Discussed special needs (if any) of the candidate and made thenecessary arrangements. Summarised information and allowed candidate to ask questions. FNSACC402, Version 3- March 2016Page 4 of 22 Assessment Submission SheetPlease read and sign this assessment coversheet and submit it together with your assessment to your Assessor by the due date.Student Name Student IDAssessor Date Due 21 December 2016DeclarationI affirm that all work submitted in this assessment is my own work and does not involve plagiarism orteamwork other than that authorised for any particular assessment activity. I have been explained andunderstood the serious consequences in case this work is found plagiarised.Student Signature: Date Signed: ____/____/____Assessor Use OnlyFirst Submission Date Re-submission Date Re-assessment DateS NYS ___/___/____ S NYS ___/___/____ S NYS ___/___/____Feedback: Trainer/Assessors Comments:I hereby confirm that I have been given feedback from the Assessor and I agree with the assessmentoutcome.StudentSignatureAssessorSignature Date ___/___/______Course Title Diploma of Business Course Code BSB50215Unit Title Prepare operational budgets Unit Code FNSACC402Version 5.0 Created on March 2016Student Feedback on Assessment: Would you like to make any comments about this assessment?Assessment ReceiptStudent Name Student IDCourse Code & Title Diploma of Business ExtensionGranted Yes No Unit Code & Title Prepare operational budgets Date Received ___/___/____First Submission Re-submission Re-assessment Received by FNSACC402, Version 3- March 2016Page 5 of 22Assessment InformationThis assessment tool is designed to gather evidence on your knowledge as well as abilities to prepare and documentoperational budgets for a variety of organisations. It applies to individuals who use specialised knowledge andsystematic approaches to undertake strategic financial activity for an organisation.It collects evidence on key foundation skills outlined in unit of competency details. Your Trainer/Assessor will gothrough the unit of competency at the very beginning of this unit explaining each element, performance criteria,foundation skill, performance evidence, and knowledge evidence that you will be assessed on via this assessmenttool. You can find more information at: FNSACC402This assessment has three parts: Assessment activity 1: knowledge based questions and practical problemsAssessment activity 2: case study- Business ScenarioAssessment activity 3: A presentation Submission requirements for each task are clearly outlined under each task to give you guidance.In order to be deemed competent in this unit you must obtain satisfactory outcome in each part of thisassessment.You must abide with the rules outlined in the following section Portfolio Requirements when submitting yourportfolio to your Trainer/Assessor. Remember! Your Trainer/Assessor is your best source of help. If you have any special needs, make sure youcheck with your Trainer/Assessor in advance of undertaking this assessment. FNSACC402, Version 3- March 2016Page 6 of 22Portfolio Requirements Proofreading Ensure the following in your final submission Appropriate tone, language and grammar Coherent structure Visual consistency Free of spelling and punctuation errorsHeadings andSubheadings Use Styles to ensure consistency (Home Styles Headings) Use the titles in your assessment tool e.g.: Assessment Activity 1Citation andReference ListUsing Harvard Style Guide, provide in-text citation and Bibliography for each external source youuse in your report.Capitalisation Use initial capitals for positions, personal names, place names, nationalities, and groups ofpeopleE.g.; Chief Executive Officer Bill Gates Sydney Australia Australian Write company/brand names as they are commercially usedE.g.; Microsoft iPhoneCover Page Attach your portfolio with a cover page including: Course Code & Title Unit of Competency Code & Title Date of submissions Your Student ID and Full Name The details of your Trainer/AssessorPortfolioStructure Follow a logical and sequential structure in your portfolio preventing ambiguity for yourTrainer/Assessor.Wording Do not write the question in your assessment. Simply place appropriate headings and thenyour answer. Word count for written tasks is given within each task. Your word count does not includeassessment cover page, table of contents, bibliography, table/figure captions, and appendix (ifany).Lists Use bullet-lists to list items or summarise contentEnsure consistent indenting and format Use correct punctuation; nothing after each list, only full stop at the end of the last item Use two-level spacing for nested lists Example 1 Example 2Font Ensure readability and legibility in text by using an easy-to-read font colour, type and size.E.g.: black, Calibri (Body), 11ptFooter Insert unit code, date and your full name.Spacing Use 1.15 as line spacing.Printing Use Moderate margins for printing (Page Layout Margins Moderate).Print Black/White unless stated otherwise by your Trainer/Assessor.Plagiarism Always abide with the principles of academic honesty, as we always check assessments forplagiarism. Provide in-text citation and Bibliography using Harvard Style referencing. FNSACC402, Version 3- March 2016Page 7 of 22Assessment Activity 1- Knowledge Based Questions and Practical ProblemsYou need to answer following questions to get satisfactory grades for this assessment activity. Make sureto answer all task in all assessments activities to get overall competent results.Task 1.1 What is a budget?What are different types of budgets?Explain budgetary control principles? Task 1.2It is very important to discuss the budget with colleagues and peers to determine and confirm scope andnature of budgetary planning, do you agree discuss. (PC-1.1)Task 1.3You are given the following information for Hyped up research service for the coming financial year2017. Prepare annual budgeted expense for coming year 2016(PC 1.2) Expected fees $350,000Marketing expense:Fixed Advertising $6,800 per annumAdvertising 4 % of Expected feesFinancial expenseInterest paid $1,400 per monthBank charges $200 per monthAdministration expense:Accounting staff cost $8,000 per monthStationary $280 per monthDepreciation of office equipment $8,500 per yearDepreciation of motor vehicles $12,400 per yearRent $2,000 per monthTravelling expense $22,000 per yearWork cover 3% of total salariesSuperannuation 9% of total salariesTelecommunication $1,000 per month FNSACC402, Version 3- March 2016Page 8 of 22 Expected fees $350,000 $Marketing expense:Fixed AdvertisingAdvertisingFinancial expenseInterest paidBank chargesAdministration expense:Accounting staff costStationaryDepreciation of office equipmentDepreciation of motor vehiclesRentTravelling expenseWork coverSuperannuationTelecommunication Task 1.4 (2.1)Luigi Domicile (registered for GST purposes) wants you to prepare monthly budgeted Profit and lossestimates for August 2015 from the data given below.Luigi is also worried about her Goods and services tax lodgement dates, as she is confused with monthlyand quarterly lodgement, suggest her.Using the information below:Revenues for July current year Hours charged to clients 2,000Charge rate used $99.00 (inc. 10% GST)August current year hours charged are expected to increase by 100%.August current year charge rate is expected to remain unchanged. Expenses for July current year Salaries $52,500 Long service leaves provision $1,050 Telephone $5,500 (inc. 10% GST) Bank charges $1,000 Insurance $2,200 (inc. 10% GST) Rent $11,000 (inc. 10% GST)FNSACC402, Version 3- March 2016Page 9 of 22August current year expenses will remain unchanged, except for Telephone (increase of 4%) andInsurance (increase of 6%). Budgeted Profit and loss statementGST -Inclusive GSTpayableGSTInputTaxcreditGST ExclusiveAmountFeesRevenuesLess expenseSalariesLong serviceleaveTelephoneBank chargeInsuranceRentProfit Task 1.5 (2.2)Alpha ltd want to prepare quarterly purchase budget. Alpha ltd has budgeted annual purchase 3900 unit.Finance manager wants to break down annual budget and wants to determine last quarter purchasebudget. Following information is given Additional data:Selling price per unit is $39 per unit after a mark-up of 30%Company policy to maintain closing stock is required to be 50% of the next months salesin units, January sale will $320.Company policy to maintain closing stock is required to be 50% of the next monthssales in units, January sale will $320. Projected sales are given below:Month October November December TotalProjected Sales in units 200 280 450 930 Also, consider the opening stock for October to be 100 units.FNSACC402, Version 3- March 2016Page 10 of 22You are required to prepare a Purchases budget in units and dollars for the next three months Month October November December TotalProjected Sales in unitsadd Closing stockEquals availableless Opening stockRequired purchases inunitsPurchases cost $ Task 1.6(3.1, 3.2)Beverly Hill Firm expects to make sales of $295,000(November), $360,000(December),$350,000(January) $365,000 (February) and $380,000(March).Beverly Hill collection procedure: Sales average 40% cash and 60% credit sales. Credit sales arecollected 80% in the month following sales and 20 % in the second following month.Beverly Hill payment procedure The Company budgets on its purchase being 60 % of sales. All expenseare incurred on credit and paid for in the month following purchase.All sales and purchase are subject to GST (the figure above are exclusive of GST). The company haselected to use the cash method to account for GST and GST payable quarterly)Prepare a worksheet to show cash receipt and payment expected for January to March and the Quarterended 31st MarchFNSACC402, Version 3- March 2016Page 11 of 22 JAN FEB MAR QUARTERCash receipt (40%)Cash from last month (80%)Cash from two month ago (20%)Total cash from salesAdd: GST 10%Cash paymentsJAN FEB MAR QUARTERCash purchase last monthAdd: GST 10%Total cash PaymentsThe summary statementJAN FEB MAR QUARTERTotal actual receiptTotal cash PaymentsSurplusOpening balanceClosing cash balance FNSACC402, Version 3- March 2016Page 12 of 22Task 1.7Assume that Pan Pacific trading has estimated sales for the next four months (3.1, 3.2) October November December JanuarySales 2,992,000 3,308,800 3,555,200 3,203,200 Pan Tel TradingWorksheet to Calculate Purchases for October to December 2016.October November December QuarterSales unit 17,000 unit 18,800 unit 20,200 unitCost of GoodsSoldClosing InventoryOpeningInventoryPurchases ($)Purchases(Number) Additional information: Organisation policy to maintain the closing inventory should be 20% of nextmonths cost of goods sold. Cost per unit is $80. Estimated January sales 18,200 unitsPrepare purchase budget for the given quarter. Pan Pacific TradingWorksheet to Calculate Purchases for October to December, 200X.October November December QuarterSales ($)Cost of Goods SoldClosing InventoryOpening InventoryPurchases ($)Purchases(Number) FNSACC402, Version 3- March 2016Page 13 of 22Task 1.8Look at the following information1. Calculate the differences, if any, between Actual and Budget results2. Consider each variance and describe whether each variance is favourable or unfavourableVARIANCE ANLYSIS REPORT Income/ expense Budget$Actual$Variance Favourable orunfavourableSales 640 000 655 000Less Variable costsCost of sales 458 000 494 500Delivery and Installationcosts19 200 13 100Sales commissions 12 800 16 375TOTAL VARIABLE 490 000 523 975Less Fixed costsAdvertising 5 200 5 500Energy 2 800 3 200Insurance 2 400 2 400Office supplies 3 700 3 300Printing & stationery 6 000 5 500 FNSACC402, Version 3- March 2016Page 14 of 22 Income/ expense Budget Actual Variance Favourable orunfavourableSalesLess Variable costsCost of salesDelivery and installationcostsSales commissionsTOTAL VARIABLELess Fixed costsAdvertisingEnergyInsuranceOffice suppliesPrinting & stationeryRentSalariesTOTAL FIXEDTOTAL COSTSNET INCOME Task 1.9 Explain three forecasting techniques What is double entry accounting Discuss variance analysisAssessment Activity 2 Case study- Business ScenarioAssume that you are working as assistant marketing manager with Johnson trading; it is small to mediumsize business. Business is involved in production, purchases and selling of different products. Read thebelow information and prepare all required operational budgets. Actual unit sales for 2016 March April May June20000 22000 25000 28000Forecast unit sales for 2017 to increase by 10% of Actual 2016Selling price based on cost price of $8 per unitplus 60% mark up on that cost per unit FNSACC402, Version 3- March 2016Page 15 of 22 Management require that each months stock of closing finished goods to be 20% ofthat months sales units. The firm is GST registered and accounts for GST on a cash basis.Direct labour cost based on Production units required @ 30 % of Cost Price paid in month incurred.Factory overhead is applied @ 100% of direct labour cost and paid in month incurredEstimated purchases for each month to be based on Production units required. Purchase cost perunit to be 40% of cost price per unitTrade creditors to be paid in month of purchaseFixed expenses to be $8000 per month,100.00%Variable expenses to be 15% of each months sales value.Expenses are to be paid in the month they are incurred.Bank balance 31 March 2017 in Overdraft.[40000] Additional information Capital 420080Property plant & equipment 650000Accumulated depreciation 130000Mortgage on property 250000 Task 2.1Before you will start preparing the budgets for Johnson trading, your first job would be to confirm thebudget with your manager /owner, (Trainer/ assessor). It is a very important step to make sure budgetobjectives are consistent with organisational aims, projects and forecasts.Prepare your budget objectives, two to three and show it to your trainer to get the confirmation thatthose are as accordance with organisational vision, aims etc. (1.1)Task 2.2Based on above information, prepare a sales budget. (PC-1.2, 2.2, 3.1, 3.2) SALES BUDGET March April May JuneForecast sales unitsSelling price per unitTotal sales in $ FNSACC402, Version 3- March 2016Page 16 of 22Task 2.3Based on above information, prepare a production budget. (PC-1.2, 2.2, 3.1, 3.2) PRODUCTION BUDGET April May JuneForecast unit salesPlus Finished goods stock closingTotal units requiredless Finished goods stock openingEquals production units requiredCost per unit in $Cost of production in $ Task 2.4Prepare a cash budget. (PC-1.2, 2.2, 3.1, 3.2) CASH BUDGET March April May JuneCollections from Trade Debtors40 % In month of sale55% in month following saleSubtotalGST collectedTOTAL RECEIPTSPaymentsTo trade creditors for purchases [100%]Direct labourFactory overheadExpensesFixedVariableGST paidTOTAL PAYMENTSSURPLUS/ DEFICITBank balance openingBank balance closing FNSACC402, Version 3- March 2016Page 17 of 22Task 2.5 (PC-1.2, 2.2, 3.1, 3.2)Based on task 2.2, 2.3 and 2.4, prepare Manufacturers Budgeted Income Statement for the periodending 30 June 2017. Use following template: SALESLess COST OF GOODS SOLDOpening Finished Goods StockPlus Cost of productionLess Closing finished goods stockGROSS PROFITLess Expenses from ordinaryactivitiesSelling, administrative and financialFixedVariableNET PROFIT from ordinaryactivities FNSACC402, Version 3- March 2016Page 18 of 22Task 2.6 (PC-1.2, 2.2, 3.1, 3.2)Based on all above tasks and information, prepare a budgeted balance sheet. Budget Balance Sheet as at 30 June 2017$ $ $OWNERS EQUITYCapitalAdd / Less Net profit / lossLess DrawingsTotal owners equityThis is represented byASSETSCurrent assetsCash at bankFinished goods stockGST paidTrade debtorsTotal current assetsNon-current assetsProperty, plant & equipmentLess Accumulated depreciationInvestmentsOther financial assetsTotal non-current assetsTOTAL ASSETSLess LIABILITIESCurrent liabilitiesGST collectedTotal current liabilitiesNon-current liabilitiesMortgage on propertyTotal non-current liabilitiesTOTAL LIABILITIESNET ASSETS FNSACC402, Version 3- March 2016Page 19 of 22Task 2.7Identify the stakeholders you will discuss and negotiate the budget beforeimplementation, also explain consultation methods. (Pc-1.3)Task 2.8While working as assistant marketing manager, what Key performance indicators andmilestones you must keep in mind. How would you confirm them with owners ormanagement? (PC-2.1)Task 2.9How would you securely store and record budgetary reports?Assessment activity 3: A presentation (1.3)This assessment activity is based on assessment activity two. Prepare 4 to 5 slides to do a presentation inthe class and in front of your trainer. You must present for maximum 5 minutes. Consider your classmatesand trainer the management of Johnson trading.Include the following points in your presentations:1. Discuss budget objectives2. Explain the importance of preparing budgets3. Explain and discuss about budgets in such a way that it would create goodwill4. Convince the stakeholders (Your classmates/ trainer), so that they cooperate with you aboutbudgets and their implementation.5. Do a small question answer session or discussion about budgets?The objective of your presentation must be to: Communicate with the audience clearly, understandably and creativelyPresent your ideas, findings and recommendations credibly to convince the audience andgain support and agreementSatisfactorily answer questions and objectionsOrganise material in an effective and logical sequence and format for the presentationDevelop a range of support materials that can be used to present a variety of ideas andconcepts for your presentationAdapt to the cultural requirements of the stakeholders as they are from diversebackgrounds with diverse abilitiesApply techniques to control the flow of information FNSACC402, Version 3- March 2016Page 20 of 22You must make this presentation professional, delivering the materials with confidence and being knowledgeableand flexible in responding to queries and feedback (see criteria in the checklist provided in the following page).All resources must be provided to candidates in order to facilitate in delivering their presentation. This may include: Internet Speakers White board Training Room Board markers Printing facilities Overhead projector Computer workstation Microsoft PowerPoint (2007-2013) (You only need to provide a USB with the downloaded presentation (in PowerPoint)Assessor Marking and Feedback Form: Presentation Checklist Performance Criteria: S NYS Comments1. Criteria & Content included introduction, clearly defines and explains subject and central message with confidence toaudience places ideas in clear, concise, and logical order maintained eye contact, appropriate facial expressions, posture andgestures supported the verbal message with appropriate vocal pitch, tone and pace stayed focused on subject throughout the presentation matched their language and style to suit the subject, the formality of thesituation, and adapted to the cultural requirements of the stakeholders used techniques to engage the audience elicited views and opinions of others by listening and questioning encouraged stakeholders to raise their queries and responded to all queriesraised by the audience applied techniques to control the flow on information inspired the audience through positive, genuine and forthright manner Convinced the audience with importance of consumer behaviour delivered on a timely mannerFinal Results: S NYS Final Comments:Assessor Initials: Date: FNSACC402, Version 3- March 2016Page 21 of 22Assessor Marking and Feedback Form: Assessment Activities Assessor Use OnlyAssessment Task S NYS CommentsAssessment Activity 1 knowledge based question answers and practical problemsTask 1.1Task 1.2Task 1.3Task 1.4Task 1.5Task 1.6Task 1.7Task 1.8Task 1.9Assessment Activity 2 Case study business scenarioTask 2.1Task 2.2Task 2.3Task 2.4Task 2.5Task 2.6Task 2.7Task 2.8Task 2.9Assessment Activity 3 PresentationPresentation FNSACC402, Version 3- March 2016Page 22 of 22 Knowledge Evidence identify and explain the key principles of budgetarycontrol describe a variety of forecasting techniques explain the principles of double-entry bookkeeping outline the key principles of statistical analysis andmeasures of variance Describe the key features of organisational proceduresand policy for financial administration.Performance Evidence Establish and confirm budgetary milestones andperformance indicators Prepare budgets for a variety of purposes and organisations Accurately record and document budget reports.Foundation skillsReadingWritingOral CommunicationNumeracyInteract with othersGet the work doneFinal Results: C/NYCFinal Comments:Assessor InitialsDate:

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