I need answers to all these questions.
10 ADDENDUM | © 2019 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE FNS50215 & FNS50217 DIPLOMA OF ACCOUNTING | BUDGET MANAGEMENT_V3.3 ASSESSMENT 1 Course Name FNS50215 & FNS50217 Diploma of Accounting Subject/module Budget Management Assessment method Part A: Written or Oral Questions Part B: Project Weighting 50% Unit of Competency FNSACC503 Manage Budgets and Forecasts Instructions 1. Assessments should be completed as per your trainer’s instructions. 2. Assessments must be submitted by the due date to avoid a late submission penalty. 3. Plagiarism is copying someone else’s work and submitting it as your own. You must write your answers in your own words and include a reference list. A mark of zero will be given for any assessment or part of an assessment that has been plagiarised. 4. You may discuss your assessments with other students, but submitting identical answers to other students will result in a failing grade. Your answers must be yours alone. 5. Your trainer will advise whether the assessment should be digitally uploaded or submitted in hard copy. Assessments that are digitally uploaded should be saved in pdf format. 6. You must attempt all questions. 7. You must pass all assessments in order to pass the subject. 8. All assessments are to be completed in accordance with WHS regulatory requirements. 11 ADDENDUM | © 2019 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE FNS50215 & FNS50217 DIPLOMA OF ACCOUNTING | BUDGET MANAGEMENT_V3.3 ADDENDUM | © 2019 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE FNS50215 & FNS50217 DIPLOMA OF ACCOUNTING | BUDGET MANAGEMENT_V3.3 Part A – Written or Oral Questions 1. a. Use one (1) sentence to define a budget. (1 mark) b. Budgeting is an entire process of developing and implementing a plan for an organisation’s activities. What activities may be involved in budgeting? List at least five (5) activities. (5 marks) c. What are the purposes of budgeting? List at least five (5) purposes. (5 marks) 2. Undertake your own research and use one (1) sentence for each, explain the key principles and practices of these terms: a. Accrual accounting (1 mark) b. Budgetary control (1 mark) c. Corporate governance (1 mark) d. Double-entry bookkeeping (1 mark) 3. a. In a short paragraph for each, clearly define and provide examples of the following terms: • Revenue (3 marks) • Expenditure (2 marks) • Cash (1 mark) b. Which budget/s are (i) revenues, (ii) expenditures, (iii) capital and (iv) cash relevant to preparing? (4 marks) 4. a. The information gathered to prepare a budget generally comes from a number of sources. List at least five (5) sources. (5 marks) b. In a short paragraph, explain how to ensure the objectives of operating budgets are clear and consistent with organisational aims and projects. (2 marks) c. In a short paragraph, explain how to ensure the objectives of financing budgets are clear and consistent with organisational aims and projects. (2 marks) d. Why is it important to ensure budget objectives are clear and consistent with organisational aims and project? (2 marks) 5. A set of policies and procedures must be created to set up the framework for the development of the budget and financial plans. What should the policy framework identify? List at least five (5) points. (5 marks) 6. Depending on the size and complexity of the operation there can be many stakeholders in the budget setting process. Discuss, in a short paragraph, at least two (2) stakeholders that may be involved. (4 marks) 7. What are the reasons that causing your budget to be rejected or cut to some extent? List at least five (5) reasons. (5 marks) 8. Reaching a consensus is the goal with any negotiation whether it be internally or externally. What should you consider when entering the negotiation process? Describe at least eight (8) considerations. (8 marks) 12 ADDENDUM | © 2019 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE FNS50215 & FNS50217 DIPLOMA OF ACCOUNTING | BUDGET MANAGEMENT_V3.3 9. You have been asked to prepare the annual budget for a small business, however, the review process results in your draft budget plan being rejected due to your management’s desire to cut costs. They have targeted discretionary costs such as travel, conference and advertising costs because the fixed costs cannot be changed. In addition, they also ask you to explore areas of opportunity to cut costs in both goods and/or the freighting of goods. What should you do? (Hint: You may need to consider which departmental managers you may negotiate, and what matters you should negotiate with them.) (4 marks) 10. What is the benefit of effective negotiation? (1 mark) 11. a. What is a milestone in budgets? (1 mark) b. Identify the first milestone on the following graph, and explain your choice. (2 marks) c. Provide one (1) example to explain why the KPIs are important indicators of business and operational performance and may have a direct or indirect implication for the financial position of the organisation. (2 marks) 12. What is the difference between horizontal trend analysis and vertical trend analysis? (4 marks) 13. There are many methods of developing sales forecasts. They can be categorised into qualitative and quantitative methods. What are the differences between qualitative methods and quantitative methods? (Hint: You should consider the differences in definition and the situations where each method is most appropriate.) (4 marks) 14. The sales manager for APC Pty Ltd has decided to use statistical modelling to help prepare the sales forecasts for the year ahead. The forecast figures for 2018 will be based on linear extrapolation of the last three years of sales volumes. With the assistance of Excel, work out the forecast figures for 2018. (Hint: You should only complete the following table. No need to submit the 13 ADDENDUM | © 2019 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE FNS50215 & FNS50217 DIPLOMA OF ACCOUNTING | BUDGET MANAGEMENT_V3.3 ADDENDUM | © 2019 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE FNS50215 & FNS50217 DIPLOMA OF ACCOUNTING | BUDGET MANAGEMENT_V3.3 Excel for this question. Round your answer to the nearest whole number) (2 marks) Product 2015 Actual 2016 Actual 2017 Actual 2018 Forecast A 1,400 1,450 1,630 B 975 1,050 1,020 15. a. List at least five (5) controllable factors that may affect revenue forecasting. (5 marks) b. List at least five (5) uncontrollable factors that may affect revenue forecasting. (5 marks) c. List at least five (5) factors that are expected to impact organisation’s future operations and may be considered in the budget. (5 marks) 16. In order to identify the appropriate assumptions, it is necessary to collect the proper raw data from the company’s financial statements, notes to the financial statements, external reports and business plans. List at least eight (8) types of raw data you may need to collect to identify assumptions. (8 marks) 17. What are the implications of forecasting to the business operation and management? (5 marks) 18. What are the differences between qualitative forecasting methods and quantitative forecasting methods? (2 marks) 19. a. Describe cash flow risk (2 marks) b. Describe at least three (3) strategies to reduce cash flow risk (6 marks) c. Describe interest risk (2 marks) d. What are the purposes of a contingency plan? (2 marks) Part A total: 120 marks 14 ADDENDUM | © 2019 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE FNS50215 & FNS50217 DIPLOMA OF ACCOUNTING | BUDGET MANAGEMENT_V3.3 Part B – Project Scenario 1 (15 marks): You have been asked to work on the cash receipt forecast for a small business. Projected sales are shown in the following table: Month Projected Sales Month Projected Sales January $920,000 April $880,000 February $770,000 May $840,000 March $720,000 June $780,000 The business has the following collection policy: f 15% of sales are collected in the month of the sales. f 70% of sales are collected in the month following the sales. f 10% of the sales are collected in the second month following the sales. f 5% of the sales are collected in the third month following the sales. Required: Prepare the cash receipt forecast for April, May and June. Show all of your working and round your answer to the nearest whole number. April May June Expected sales 15% collected in the month of sales 70% collected in the month following sales 10% collected in the 2nd month following sales 5% collected in the 3rd month following sales Total cash receipts from sales Scenario 2 (10 marks): The following is a budget prepared by Tony’s Tree Service for the 3 months ending 30 April. 15 ADDENDUM | © 2019 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE FNS50215 & FNS50217 DIPLOMA OF ACCOUNTING | BUDGET MANAGEMENT_V3.3 ADDENDUM | © 2019 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE FNS50215 & FNS50217 DIPLOMA OF ACCOUNTING | BUDGET MANAGEMENT_V3.3 February March April $ $ $ Inflows Fees Received 48,000 36,000 $40,320 Outflows Wages 12,500 10,000 $10,200 Office Expenses 2,200 1,800 $1,872 Equipment Expenses 2,600 1,600 $1,664 Motor Vehicle Expenses 5,200 4,600 $4,784 Advertising 3,600 2,800 $2,912 Other 3,600 3,000 $3,120 Total Outflows 29,700 23,800 $24,552 Net Inflow (Outflow) $18,300 $12,200 $15,768 The following assumptions (use the April figures) are used to prepare the May budget: f Fees received are expected to fall by 5%. f Wages will fall by 2%. f All other expenses will fall by 10%. Required: a. Complete a budget for May. Show all of your working in the calculation. Round your answer to the nearest whole number. (9 marks) Calculations May Inflows Fees Received Outflows Wages Office Expenses Equipment Expenses Motor Vehicle Expenses Advertising Other Total Outflows Net Inflow (Outflow) b. Determining the closing cash projection for May when the opening cash balance for May is $66,268. Show your working in the answer. (1 mark) Part B total: 25 marks Assessment 1 total: 145 marks Trainer Instructions Unit of Competency FNSACC503 Manage Budgets and Forecasts Grading System Session Plan Assessment Mapping Assessment 1 Part A – Written or Oral Questions Part B – Project Assessment 2 Part A – Written or Oral Questions Part B – Project Marking Guide/Suggested Answers for Trainers Assessment 1 Part A Assessment 1 Part B Assessment 2 Part A Assessment 2 Part B Activity Guide/Suggested Answers for Trainers 16