Assignment 2
Budgeting
Deadline
As indicated on the VLE
Learning Objectives for Course.
1. Develop quantitative skills necessary to read, interpret and perform the calculations for the accounting reports involved in cost control and profit planning.
2. Evaluate and identify financial strengths and weaknesses of a business through appropriate conceptual analysis.
3. Analyse information and knowledge effectively in order to develop meaning to solve complex problems and make decisions :
Guidelines for assignment
ü This is an individual assignment
ü Ground your answer in relevant theory
ü Plagiarism and reproduction of someone else’s work as your own will be penalized
ü Make use of references, where appropriate — Use Harvard or APA referencing method.
ü Late submission are not accepted
ü Structural elements should include an introduction, main body, and a conclusion
ü Weight — 50%
ü Word count guidance : question 1 1000, question 2 n/a
ü Type of assignment: Excel Assessed Work Folder and Business Report
ü Start / Finish : Week 5 – 6
ü Learning Outcome Assessed: 3,4
Question 2 – Budget Preparation – Intellectual and Practical Skills
Application of learning:
Prepare the following budgets for the 6 months ending September 2013. You are required to use Excel spreadsheets, which can be copied into word once you finish, should you wish. A template is available for you to use as a basis.
a) Sales budget
b) Cash Budget
c) Debtors Budget
d) Creditors Budget
e) Production Cost Budget
f) Raw Materials and finished goods Budget
g) Profit and Loss Account Budget
h) Balance Sheet Budget
Draw conclusions from your budgets and prepare a short management report.
Europe Ltd
Balance Sheet as at 31st March 2013
£
| Fixed Assets | 100,000 | |
| Current Assets
Debtors (Feb E10000, March E14000)24,003 Stock Raw Materials 9,003 Finished Goods13,003 46,000 |
||
Current Liabilities
Creditors (Feb E8000, March £10000) (1s,cco)
Bank (3,003)
(21,C00)
Net Current Assets / Working Capital 25,000
NET ASSETS 125,000
Financed by:
Share Capital 100,030
Profit and Loss 25,030
TOTAL SHAREHOLDERS FUNDS 125,000
Notes:
Fixed Assets are depreciated at 20% straight line method per year. Purchases will be £5,000 in April, increasing by £1000 per month and paid 2 months after purchase.
Sales in April will be £20,000, increasing by £2,000 per month and paid 2 months in arrears.
· Production costs per unit will be:
o Direct materials £15
o Direct Labour £12
o Production overheads £5
· Direct Labour and production overheads are paid as they are incurred. Production units per month are 500 units
· Sales units in April are 400 units, increasing by 40 units per month.
·
Question 2 – Budget Preparation – Intellectual and Practical Skills
Application of learning:
Prepare the following budgets for the 6 months ending September 2013. You are required to use Excel spreadsheets, which can be copied into word once you finish, should you wish. A template is available for you to use as a basis.
a) Sales budget
b) Cash Budget
c) Debtors Budget
d) Creditors Budget
e) Production Cost Budget
f) Raw Materials and finished goods Budget
g) Profit and Loss Account Budget
h) Balance Sheet Budget
Draw conclusions from your budgets and prepare a short management report.
Europe Ltd
Balance Sheet as at 31st March 2013
£
| Fixed Assets | 100,000 | |
| Current Assets
Debtors (Feb E10000, March E14000)24,003 Stock Raw Materials 9,003 Finished Goods13,003 46,000 |
||
Current Liabilities
Creditors (Feb E8000, March £10000) (1s,cco)
Bank (3,003)
(21,C00)
Net Current Assets / Working Capital 25,000
NET ASSETS 125,000
Financed by:
Share Capital 100,030
Profit and Loss 25,030
TOTAL SHAREHOLDERS FUNDS 125,000
Notes:
Fixed Assets are depreciated at 20% straight line method per year. Purchases will be £5,000 in April, increasing by £1000 per month and paid 2 months after purchase.
Sales in April will be £20,000, increasing by £2,000 per month and paid 2 months in arrears.
· Production costs per unit will be:
o Direct materials £15
o Direct Labour £12
o Production overheads £5
· Direct Labour and production overheads are paid as they are incurred. Production units per month are 500 units
· Sales units in April are 400 units, increasing by 40 units per month.
