62667 – Assessment CoversheetUnit/s Assessed FNSACC412 Prepare

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Assessment /s Operational BudgetsAssessment Name FNSACC412 AssignmentType of AssessmentThis summative assessment will enable your assessor to make a judgement of competency based on the of your completed assessments against the requirements of the unit/s of competency in this module.BenchmarkThe Assessment Benchmark developed for each unit of competency is the evidence criteria used to judge the quality of performance (i.e. the assessment decision-making rules). Assessors use these benchmarks to make judgements on whether competency has been achieved and to determine if you have performed to the standard expected to meet the unit requirements.Reasonable AdjustmentWhere appropriate Monarch Institute will allow flexibility in the way in which each unit is assessed based on the needs of an .Assessment CodingAssessment of this course is based on competency-based principles.S = SatisfactoryNS = Not SatisfactoryIf you fail to perform satisfactorily for the assessment in the prescribed way you may be assessed as ‘Not Satisfactory’. You are required to be assessed as ‘Satisfactory’ in all assessments for each unit of competency.Re-assessmentYour assessment can be submitted after you have reviewed the learning materials and practiced enough to feel confident in your resubmission. You have two weeks from your last submission feedback to resubmit. You are re-assessed in only the areas where your assessor has indicated you were initially assessed as NS. It is at the assessor’s discretion to re-assess the entire assessment should an overall understanding not be demonstrated. When you are re-assessed as ‘satisfactory’ after re-submission you will achieve competency for this assessment.Declaration of Understanding and AuthenticityI acknowledge the assessment process has been explained and agree that I am ready to undertake assessment. I am aware of where to find the assessor’s feedback for the assessment. I am aware of the appeals process, should the need arise. I also understand I must be assessed as ‘satisfactory’ in all parts of the assessment/s to gain an overall competent result for the unit/s of competency. If I am found to be NS after a second attempt, it is at the assessor ‘s discretion whether I may be permitted one final attempt. I am aware that a ‘not competent’ final outcome means I may incur fees for re-enrolment in the unit/s.I certify that the attached material is my original work. No other person’s work has been used without due acknowledgement. I understand that the work submitted may be reproduced and/or communicated for the purpose of detecting plagiarism. I understand a person found responsible for academic misconduct will be subject to disciplinary action (refer to Student Guide).* I understand that by typing my name or inserting a digital signature into this box that I agree and am bound by the above student declaration.Student Name*: Date:Submission instructions:1. Complete the Declaration of Understanding and Authenticity (above).2. Once you have completed all parts of the assessment login to the Monarch Learning Management System (LMS) to submit your assessment.3. In the LMS, click on the link to ‘Submit [assessment name]’ in your course and upload your assessment files. Click save and then click submit assignment4. Please be sure to click ‘continue’ after clicking ‘submit assignment’.Assessment ActivitiesShort Answer and Worked Answer QuestionsFNSACC412 – Prepare operational budgetsThe following questions are based on the material in the textbook “Prepare Operational Budgets”by Richard Hughes & Tony Kirby, 6th Edition (January, 2016).Activity instructions to candidates• This is an open book assessment activity.• You are required to read this assessment and answer all questions that follow.• Please type your answers in the spaces provided.• Please ensure you have read “Important assessment information” at the front of this assessment• Estimated time for completion of this assessment activity: 2-3 hoursThe following questions are based on the material in Chapter 1:Q1. James Ltd produces a single product which it sells for $100.00 per unit.The product requires $45.00 per unit in variable costs to produce and sell, and fixed costs per annum are $1,100,000.Determine:a) The dollar sales necessary to break even; andb) The income statement if 18,000 (Pessimistic) or 22,000 (Optimistic) are sold.a) Breakeven dollars. (Show your workings)b) Income StatementProjected Income Statement18,000 Units 22,000 UnitsSales revenueLess: Variable costsContribution MarginLess Fixed costsProfit (Loss) before taxQ2. (a) Sharp View Software wish to produce an expenses budget for the year ending 30 June 2016 based on the previous year’s actual figures.Expenses for Year ended 30 June 2015Sales Commissions $ 350,000Consultancy Fees 136,000Wages 482,000Telephone 16,000Stationery 11,000Repairs 9,600The following assumptions are used to prepare the budget:• Sales commissions and consultancy fees are expected to fall by 5% due to less demand within the .• Wages will rise by 3%.• Telephone costs will fall by 5% due to a new contract being negotiated.• Stationery costs will rise by 5%.• Repairs: no change.Sharp View Software – Expenses Budget for Year ended 30 June 2016Y/E 30 June 2015 % Change Y/E 30 June 2016Sales commissionsConsultancy feesWagesTelephoneStationeryRepairsTotal(b) When would it be appropriate for a firm to use qualitative forecasting techniques instead of quantitative forecasting techniques?The following questions are based on the material in Chapter 2:Q3.City Mowers Pty Ltd are wholesalers of two types of mowers. The sales for the quarter ending 31 December 2015 were as follows:Units Selling PriceMower X October 1,500 $149.00November 1,300December 1,400Mower Y October 2,000 $185.00November 2,500December 2,700Predictions are that the sales volume for mower X will increase by 7% in January and increase by5% for both February and March. (Based on the figures for October, November and December respectively).Sales for Mower Y are expected to decrease by 5% for January, February and March. (Based on the figures for October, November and December respectively.)Required:Using the format below, prepare separate Sales Budget for each of Mower X and Mower Y, for the three months ending 31 March 2016.Mower X – Actual and Budgeted salesACTUAL BUDGETEDOctober November December January February March TOTALExpected change % % %Selling price $Unit salesSales revenue $Mower Y – Actual and Budgeted salesACTUAL BUDGETEDOctober November December January February March TOTALExpected change % % %Selling price $Unit salesSales revenue $Total Budgeted Sales Revenue (both products) $Q4.Hay and List is a firm of accountants. Between them, the two partners work 2,800 hours per annum. The current charge­out rate is $200 per hour.Next year the charge out rate will increase by 10%. The firm’s current market share of billable hours is 10% and this is expected to grow to 15% next year.Required: Prepare a fees income budget for the year. Use the layout below to show your workings.Fee Income Budget:Size of current total billable accounting market = _________________________ = ________ hoursPredicted hours for next year = _________% of total hours = ________x ________ = _______hoursNew charge out rate =____________x ________ = $________ per hourBudgeted fees income = __________hours at $ ___________per hour = $____________The following questions are based on the material in Chapter 3:Q5.The company, Out­of­It’s, expected revenues and expenses for the quarter ended 31 December are:October November DecemberProjected Sales $135,000 $160,000 $145,000Monthly expenses:Wages & Salaries (split Marketing 55%, Administration 45%) $ 20,000Depreciation of Motor Vehicles for marketing activities 1,200Depreciation of fixtures and fittings(split Marketing 55% and Administration 45%) 1,500Stationery for administration activities 900Rent for administration activities 600Interest on loan 500General expenses (split Marketing 60% and Administration 40%) 1,000Bank charges 75Advertising $1,200 p.m. plus 3% of salesCommission 4% of salesCartage 2% of salesDiscount Allowed 1.5% of salesPayroll on costs being 5.0% of Wages and SalariesRequired:Prepare a classified expenses budget for the quarter ending 31 December using the table below.Tip: Ensure that all expenses are for the quarter, i.e. 3 months.Classified Expenses Budget – Quarter ending 31 DecemberBudgeted sales revenue for Dec quarter = $_____________________Marketing Administration Financial TOTAL $Wages and salariesDepn of motor vehiclesDepn of fixtures & ftgsStationeryRentInterest on loanGeneralBank chargesAdvertisingCommissionsCartageDiscount allowedPayroll on-costsTotal Budgeted ExpensesThe following questions are based on the material in Chapter 4:Q6.The following information relates to the business of Sweet Idea.Actual Credit Sales amount to:March April May$7,000 $5,000 $4,000Customers normally pay their debts at the following rate:• 60% in first month after sale • 40% in second month after salesEstimated Credit Sales:June July August$3,000 $6,000 $8,000Required:Prepare an Accounts Receivable collections budget, for the months of June, July and August (no GST).Sweet Idea Accounts Receivable Collections BudgetApril May June July AugustCredit SalesCollections:One Month after saleTwo Months after saleTotal ReceiptsQ7.From the information provided by Better Land below, prepare a cash payments budget for the quarter ended December 31 (no GST).Expected purchases for the budget period are:October November December$6,500 12,000 15,000Cash expenses to be incurred during the period:• Rent, $6,600 per month• Wages, $8,500 in October and November and $14,000 in December• Marketing expenses $2,200 in October, increasing to $3,600 in November and December.• Administration and general expenses $5,200 per month.• Financial expenses $420 per month.Other information:• Inventory purchases are paid for in the month following purchase.• The balance of Accounts Payable on September 30 is $4,840.Required:Prepare a cash payments budget for the quarter ended December 31 (no GST).Cash Payments BudgetOctober November DecemberPurchasesRentWagesMarketing ExpensesAdmin & General ExpensesFinancial ExpensesTotal paymentsQ8.Prepare a cash budget for Messara for January, February and March.All amounts below include GST where applicable. Expected receipts are:Cash Sales Collections from A/cs ReceivableJanuary 5,800 9,500February 6,600 8,200March 7,900 6,800Budgeted purchases and wages are:Purchases WagesDecember 11,000 –January 13,200 2,900February 15,400 2,700March 17,600 2,50050% of purchases are paid in the month they are incurred. The rest are paid the following month.Wages are paid in the month they are incurred.The bank account balance at 31 December is $9,200.Required:Prepare the cash receipts, cash payments and cash budgets for Messara for January, February and March.Receipts Budget January February MarchCash salesCollections from DebtorsTotal receiptsPayments Budget December January February MarchPurchasesPayments:Same monthOne monthWagesTotal paymentsCash Budget January February MarchOpening Cash BalanceAdd: Receipts= Cash AvailableLess: Payments= Ending Cash BalanceQ9.Video role play taskYou are the bookkeeper for Brad’s Vegan Ice Creamery. The business has had a bumper year in terms of sales volumes, but there are concerns about the fall in profits. Bradley Stanton, the owner of Brad’s Vegan Ice Creamery, has called a meeting with you (the bookkeeper) and the Melinda (sales manager) to discuss the results of operations for the year.In your meeting, you’ll discuss:- The information below- Milestones and performance indicators- The variances in the budget, and what they mean- Brad and Melinda’s views and opinions on the budget information- Plans to manage the budget for the coming yearSales volumes: Budget 750,000 litres; Actual 795,000 litresProfit & Loss Budget ($000) Actual ($000) Variance ($000)Sales $12,000 $14,310 $ 2,310 FavourableLess Cost of goods sold $ 6,750 $ 8,586 $ 1,836 UnfavourableGross profit $ 5,250 $ 5,724 $ 474 FavourableLess operating expenses:Wages & commission $ 1,800 $ 1,940 $ 140 UnfavourableRent $ 800 $ 800 $ 0Advertising $ 650 $ 890 $ 240 UnfavourableInsurance $ 240 $ 240 $ 0Other $ 100 $ 230 $ 130 UnfavourableTotal expenses $ 3,590 $ 4,100 $ 510 UnfavourableNet Profit $ 1,660 $ 1,624 $ 36 UnfavourableGeneral instructions:• Students must perform with at least 1 other person. Using just 1 other person to play multiple roles is completely OK. Alternatively, you can use as many other persons as there are roles.• The other person(s) can play multiple roles except for the role required to be played by the student.• There is no requirement for the other person(s) to be visible in the video, so if your partner(s) would prefer not to be visible, that’s OK.• The student must be visible throughout the video.• All persons must be audible throughout the recording.• Using a camera phone is often a quick and easy way to record the video.InstructionsYou will need at least one partner for this exercise, to read/play the parts of the other stakeholders. Give them the role play script titled ‘Budget meeting’. You only need one partner; they can read all the parts other than yours.Note: You will need a calculator to perform some basic calculations before performing this role play. Read the script to determine what you’ll need to calculate and prepare yourself and the figures before you begin the role play.Video record your meeting with Brad and Melinda at Brad’s Vegan Ice Creamery. Follow the video recording process you’ve used before (also on the LMS).Upload the meeting video recording when you upload this written assignment document.Please name your roleplay file with your surname followed by mod 4.2. For example, Smith Mod 4.2CriteriaFor this task, you’re being assessed on your ability to:• Student makes an effort to build rapport with colleagues• Student discusses budget variance with the owner• Student clarifies budget results• Student engages with the owner regarding costs• Student elicits owner and sales managers’ opinions on budget targets/ideas• Student answers question about reduced COGS impact on profit projectionQ9 Video role play taskBrad’s Vegan Ice CreameryBudget meetingRole Play ScriptNotes:? This role play has three different roles, including the student/bookkeeper. You: bookkeeper? Brad: owner? Melinda: sales managerInstructions:Remember what you’re being assessed on: your operational budget skills and your communication skills, as outlined in the instructions for Q9.? If you only have one partner, they read/play all the roles except yours.? You’ll need to have the answers to previous questions ready to guide you in this discussion.? The parts are indicated with names in brackets, [YOU] [BRAD]? When something is written in bold, it’s just a guide – not a line you have to read word-for-word.There’s often no script for what you say; just guidelines. That’s part of the challenge! Don’t read these lines out. Instead, answer in a way that fulfils the guidelines. For example, if the guideline for you were:[YOU]: Name and describe a fruit. Say something good and something bad about the fruit.…you might say “Apples. They’re red, juicy, and crunchy. They’re high in fibre, but you can’t eat the core.”? Normal speech is written as follows. Read these parts out.[MARY]: Let’s get this meeting started.? Instructions for actions or body language are written in italics as follows. Don’t read these parts out.[FRED]: Look angry and raise your hand.- – – – – – -[BRAD]: Thanks for coming to this meeting.First things first: good work, everyone! It looks as if our sales this past year exceeded the budget.We were expecting to sell 750,000 litres of ice cream, like last year, but it turns out we sold 795,000 litres.Credit goes to our sales staff for their hard work![YOU]: Say something nice to Melinda about her sales result.[MELINDA]: Smiling[MELINDA]: Thanks! Our full range is now in more stores than ever before.[BRAD]: I’m pretty happy about the sales volume. There’s just one thing I am concerned about: our costs.Despite increased sales, actual net profit is down compared to the budgeted net profit figure.[MELINDA]: Oh, that’s disappointing. Can you tell us the profit figures?[YOU]: Confirm the Actual and Budgeted Net Profit and variance figures to Melinda and Brad.[BRAD]: Given sales have increased, what could explain the fall in net profit?[YOU]: Tell Brad and Melinda why you think profits are down.Refer to the numbers in the budget information and highlight the unfavourable cost/expense variances, especially mention the largest unfavourable cost variance.[BRAD]: OK, thanks for that. I know the volume of sales has increased, but has the per litre selling price changed?[MELINDA]: Yes, good news! The selling price per litre actually increased slightly compared to budget.[BRAD]: Turns to bookkeeper[BRAD]: Can you tell us exactly how much was the actual and budget price per litre?[YOU]: Tell Brad and Melinda the dollars per litre actual price per litre and budgeted price per litre (TIP: you’ll need to calculate this using Sales dollar amount divided by Sales volume for Actual and then for Budget. You can do this before commencing the role play).[BRAD]: That’s awesome! So it seems costs are where we should focus our attention.[BRAD]: Turns to bookkeeper[BRAD]: So what can we do to control these costs?[YOU]: Talk Brad and Melinda about one of your ideas for controlling costs. For example, you’ll try to reduce Cost of Goods Sold by 10% while maintaining the same sales volume.[BRAD]: Sounds good!Just based on that idea alone, how much of an increase in profit do you think we can make over the next year, assuming all other sales and expense amounts remain constant?[YOU]: Explain how your idea would have an impact on profits.Suggest some budget process and review milestones to implement your idea. For example, you’ll target reducing COGS by a small percentage each quarter to achieve a total 10% reduction for the year. You’ll plan to do the calculations and review each month to make sure you are on track to hit your quarterly milestone targets.Ask Brad and Melinda what they think of the idea.[BRAD]: Great, sounds like a good idea![MELINDA] Yeah, that’s definitely worth trying.[BRAD]: OK, thanks everyone, that’ll do for now. Let’s get to work!- – – – – – –

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