BSBFIM601 Manage Finances Sample Assignment

ASSESSMENT 1
PART A -
CURRENT YEAR BUDGET AND PROJECTED FINANCIAL STATEMENT
Budget Scenario - 1 (budgeted projections)
Particulars	Reference	Dollars (in AUD)
Total sales	A	1,623,000.00
Total purchase	B	701,400.00
Gross Profit	C= A-B	921,600.00
Total expenses	D	402,000.00
Net Profit	E= C-D	519,600.00
Budget Scenario - 2: If total sales decreased by 12%
Particulars	Reference	Dollars (in AUD)
Total sales	A	1,623,000.00
Decrease in sale - 12%	B	194,760.00
Net sale after decrease in total sales	C= A-B	1,428,240.00
Total purchase	D	701,400.00
Gross Profit	E= C-B	726,840.00
Total expenses	F	402,000.00
Net Profit	G= E-F	324,840.00

Budget Scenario - 3: If net sales increase by 8% and reducing total sales by a further 3%
Particulars	Reference	Dollars (in AUD)
Sales	A	1,623,000.00
Increase in sale - 8%	B= A*8/100	129,840.00
Total sales	C= A+B	1,752,840.00
Decrease in total sales - 3%	D= C*3/100	52,585.20
Net sales	E= C-D	1,700,254.80
Total purchase	F	701,400.00
Gross Profit	G= E-F	998,854.80
Total expenses	H	355,000.00
Net Profit	I= G-H	643,854.80

Budget Scenario - 3: If expenses of $47,000 has been cut down
Particulars	Reference	Dollars (in AUD)
Sales	A	1,623,000.00
Increase in sale - 8%	B= A*8/100	129,840.00
Total sales	C= A+B	1,752,840.00
Decrease in total sales - 3%	D= C*3/100	52,585.20
Net sales	E= C-D	1,700,254.80
Total purchase	F	701,400.00
Gross Profit	G= E-F	998,854.80
Expenses	H	355,000.00
Less: Staff wages and salary	I	47,000.00
Total Expenses	J= H-I	308,000.00
Net Profit	K= G-J	690,854.80

Part – B

Ed’s whitegoods 1-year result:

Total Sales: $1,623,000
Total Purchase: $701,400
Total Expense: $402,000

Variance analysis between budgeted and actual figures

Item	Budgeted [2015, from assessment 1]	Actual	Variance analysis
Total sale	$1,219,651.85	$1,623,000	$403,348.15
Total purchase	$629,842.5	$701,400	$71,557.5
Total Expense	$456,256.24	$402,000	$54,256.24

Major difference:

1. Total sale depends on customer. The budget is predicted base on assumption that the consumer confidence effect the total sale by 12%. Moreover, 3% decrease from the effect cost impact which raise the sale prices by 8%.

Discrepancy:

It is shows that the actual total sale is higher that budget estimation by 33%. This is a positive discrepancy. While total purchase is slightly over prediction by 11.36%. However, total expense is less than what has been predicted at a figure of 13.50%.

The area that concern most is total sales, the listed below shows the reason behind large discrepancy;

Consumer confidence is more of a feeling. To estimate into a quantity impact to budget is very sensitive. The prediction value may not come with high accuracy data.
Increase in sales prices does has direct effect on total sales. Yet, the actual impact must be precisely calculated based on previous sale history. Estimation may not be accurate.
Estimation does not have a legit prove of how the number are calculated
Does not implement historical data analysis in estimation
Some quantity is not able to correlate to measurable unit (i.e. Customer confidence)

From all 5 reason, it can be concluded that the estimated budget is not accurate and needed more backup historical data analysis in order to improve accuracy.

Effectiveness of cost budget technique:

It is quick and easy to prepare. It prevents conflict within the organization as everyone follows a consistent approach. The impact of change can be seen quickly.

Recommendations:

Focus on good management
Track the flaw and try to prevent it the future
Follow up on annual budget
Use positive variance analysis

Assessment – 2

Projection/Variance Analysis of budgeted figures and actual figures

Variance analysis ranges from simple and straightforward to sophisticated and complex. Some cost-accounting systems separate variances into many types and categories. Sometimes a single result can be broken down into many different variances, both positive and negative.

Ed’s Whitegoods 1 year result						*Variance/difference*
*Budgeted figures (in AUD)*			*Actual figures (in AUD)*			*Variance/difference*
Total sales	1,610,000		Total sales	1,623,000		*Increase in sales by 13,000 than the budgeted sales*
Total purchases	701,000		Total purchases	701,400		*Increase in purchase by 400 than the budgeted purchase*
Total expenses	500,000		Total expenses	402,000		*Decrease in total expenses incurred by 8,000 than the budgeted expenses*
Budgeted Profit		409,000	Actual Profit		519,600	Therefore the overall actual profit is higher than the budgeted profits

In light of the above, it’s evident that the actual sales achieved is high than the budget targeted to achieve. And the discrepancy that occurred has a positive impact on the business during the year under operation.

This part of assessment is to evaluate commercially available financial management software. The purpose is to research a tool for advance the financial management of employer. There are factors that must take into account for consideration:

Price
Usability
Features and functions
Compatibility with other programs
Compatibility with other specialists

The following detail are an evaluation result for top 5 financial management program that are commercially available.

Item	FreshBooks	Wave	QuickBooks	Xero	Zoho
Price	$9.95	Free Customer service cost extra	$10.36	$6.30	$24.00
Usability	Create invoices, estimation and quotation prices Tracks & Pay bills Manage vendors& purchase order Manage items & services Track time and expense Payroll & HR	Create invoices, estimation and quotation prices Tracks & Pay bills Manage vendors& purchase order Manage items & services Track time and expense Payroll & HR	Create invoices, estimation and quotation prices Tracks & Pay bills Manage vendors& purchase order Manage items & services Track time and expense Payroll & HR	Create invoices, estimation and quotation prices Tracks & Pay bills Manage vendors& purchase order Manage items & services Track time and expense Payroll & HR	Create invoices, estimation and quotation prices Tracks & Pay bills Manage vendors& purchase order Manage items & services Track time and expense Payroll & HR
Feature & function	Best friendly user interface.	Friendly user interface. Although some function are hard to use	Friendly user interface. Although some function are hard to use	Best friendly user interface	Friendly user interface. Although some function are hard to use
Compatibility with other programs	Import bank transaction, Customizable, Mobile access	Import bank transaction, Mobile access	Import bank transaction, Mobile access	Import bank transaction, Customizable, Mobile access	Import bank transaction, Mobile access
Compatibility with other specialists	Free accountant access, user community, free advisory session	Free accountant access, user community, free advisory session	Free accountant access, user community, free advisory session	Free accountant access, user community, free advisory session	Free accountant access, user community, free advisory session

In conclusion, FreshBooks and Xero rank the highest score in comparison chart. Despite the price difference, both have friendly user interface with adequate usability, function and feature enough to perform account activity commercially. Hence, it is up to employer to choose their favorite interface from this two financial program.