Task 2,3 and 4 needs to be done

NARRATIVE REPORT
· INTRODUCTION
If one has to achieve desired goal strategic plan is required, then budget is prepared. The process of preparing budget is known as budgeting. Preparation of budget provides a detailed and descriptive roadmap of what is to be done and by whom it is to be done, and how it is to be done. It is generally prepared for a particular period which can be monthly quarterly annually or weekly. The types of budgets which can be prepared are as follows:
· Cash Flow Budget
· Operating Budget
· Financial Budget
· Sales Budget
· Production Budget
· Overheads Budget
· Personnel Budget
· Marketing Budget
· Static Budget
· Master budget
In this case the question requires some budgets to be prepared. This report highlights the assumption on the basis of which budgeting is done, calculation involved and any information , if any , which was required to be disclosed for understanding the budget. In this case the following budgets were required to be prepared:
· Sales Budget.
· Production Budget (in units).
· Purchase budget
· Manufacturing Cost Budget.
· Cass Budget
· Capital Expenditure Budget (not prepared, see below to find out why not prepared).
The summary of each budget prepared along with underlying assumption and methods and other details are mentioned below. Detailed explanation with respect to each budget is given question wise as mentioned in the word file provided.
· OBJECTIVE OF BUDGET
Objectives of Budget are as follows:
· It provides assistance in predicting cash flows.
· It helps in allocation of resources.
· It provides assistance in measuring performance.
· It provide a structure and assist in managing economic stability.
PROCEEDURE & ASSUMPTION FOLLOWED FOR PREPARATION
The procedure underlying the sales budget given above is mentioned as follows:
· Sale unit is calculated based on the forecast given and sale price is given.
· After determination of unit sold and sale price per unit the budget of first quarter of the year 2018 is prepared.
· The calculation as mentioned above is done separately for both Dinning and Buffet.
· However in assessment task 2 it is given sale price 40% mark up on cost of goods sold. In that case sale price is calculated accordingly.
PROCEEDURE & ASSUMPTION FOLLOWED FOR PREPARATION OF PRODUCTION BUDGET.
The procedure underlying the Production budget given above is mentioned as follows:
· Calculation of the unit to be produced is based on the formula mentioned below:
Opening Stock + Purchase= Sale + Closing Stock.
· The Sales Budget prepared earlier highlights the unit to be sold. How the sales unit sold is calculated, the procedure underlying the sale budget and other information required for understanding the sales budget is mentioned above.    
· Opening inventory of Dinning and Buffets at the beginning of the quarter and closing inventory of Dinning and Buffets at the end of the quarter is provided in the given question.
· Based on the information, that is opening inventory, closing inventory and total units sold of first quarter and each month in the quarter formula used for calculation, units to be produced in the first quarter and each month can be calculated.
· Now other point to remember is closing inventory of one month is the opening inventory of the other month....