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Pages:
2 pages/≈550 words
Sources:
5 Sources
Level:
APA
Subject:
Accounting, Finance, SPSS
Type:
Research Paper
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
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Topic:

Research and Describe Budget Planning and Control (Research Paper Sample)

Instructions:

Babycakes, a specialty bakery, is the company that will be considered for all parts of your budget planning and control report.
1.Briefly discuss the ways a realistic budget will benefit the owner of Babycakes versus having no budget at all. Be sure to use Babycakes as the company and any specific product details in your explanation.
2.Prepare a sales budget for the LA Babycakes store for the 4th quarter of 2016. Present the number of units, sales price, and total sales for each month; include October, November, and December, and a total for the quarter. Use one-half of the Valentine's Day sales as the basis for a usual day in the new quarter. Use 30 days for each month. Calculate the total sales for each month for October, November, and December.
3.Create three (3) new products, one (1) for each of the three (3) holiday seasons in the 4th quarter. Estimate the sales units, sales price, and total sales for each month. Describe the assumptions used to make these estimates. Include an overview of the budget in the report, presenting the actual budget as an appendix with all data and calculations. Add these amounts to your sales budget.
4.The owner of Babycakes is interested in preparing a flexible budget rather than the static budget she currently uses. She does not understand why, when sales increase, her static budget often shows an unfavorable variance. Explain how a flexible budget will overcome this problem. Use the details of your newly prepared budget for the 4th quarter of 2016 to address her concern.
5.Imagine that Babycakes is facing a financial challenge that is causing the actual amount of money that it spends to become significantly more than its budgeted amount. Include a discussion of your own unique cause of the overspending. Explain the corrective actions needed to address these challenges.
6.Integrate relevant information from at least five(5 ) quality academic resources in this assignment

source..
Content:


Assignment: Budget Planning and Control
Student's Name
Institutional Affiliation
Assignment: Budget Planning and Control
Benefits of a Realistic Budget
Budgeting plays a significant role in the management of any business form. It enables organizations to meet their overall objectives while monitoring their expenses and costs. Therefore, having a realistic budget will be beneficial to Babycakes compared to having no budget at all. A realistic budget will enable the company to know what it needs as inputs and their costs. It enables the bakery to have a prior planning and an understanding of the amount of money it needs to produce the cakes. This one ensures that resources allocated for a specific task are not redirected or used in other uses (Cardos, 2014). Therefore, having a budget, Babycakes will be able to keep record of the resources as well as finished products to ensure that they stick to the plan. On the other hand, having no budget makes it hard for the company to keep track or reconcile the expenditures versus revenue.
Sales Budget Projections
In the 4th quarter, Babycakes would like to add new products to its portfolio for the upcoming three holidays. October has Halloween and Babycakes would like to make delicious candy cupcakes. November's Thanksgiving will see Babycakes creating sweet potato cupcakes while the all-time major December Christmas holiday, Babycakes will create candy cane cupcakes. The table below shows the sales projections of Babycakes for October, November and December months.
Babycakes 4th Quarter Sales Projections


October
Budget

November
Budget

December
Budget

4th Quarter Total Budget

Units

24,000

23,900

24,300

72,200

Sales

96,000

95,600

97,200

288,800

Costs of Production

34,800

34,655

35,235

104,690

Gross Profit

61,200

60,945

61,965

184,110

Expenses (Fixed Rent)

4,000

4,000

4,000

12,000

Net Income

57,200

56,945

57,965

172,110


Sales Assumptions

Days

30

Units per day

800

Sales Price

$4.0

Holiday Sales Assumptions

Month

October

November

December

Units

700

650

950

Production Costs Per Unit = $1.45
From the above projections, Babycakes October unit sales are 24,000, November 23,900

...
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