BSB51415: Diploma of Project Management - Finance Assessment Answer

Subject Code: BSB51415 Internal Code: 1AIDED

Diploma of Project Management - Finance Assessment Answer

Assignment Task: 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 the assessments in order to pass the subject. 8. All assessments are to be completed in accordance with WHS regulatory requirements. Part A – Written or Oral Questions 1. List TWO sources of information that may help a manager to estimate the cost for the coming year.  2. Identify and briefly describe THREE examples of external banking records which are used for the purpose of record keeping 3. List the relevant personnel you may communicate within the organisation, to ensure that documented outcomes and information about customers, competitors and business competitors can more easily be obtained. 4. What is a contingency plan? Explain the reasons for a contingency plan? What are the steps to follow to prepare and develop a contingency plan? List THREE specific areas to include in the plan. 5. What is a financial plan? What should financial plans include? 6. What are the external and internal factors that may affect financial planning? 7. What is the budget? What are the objectives of a budget? What is the role of the master budget? Scenario: You are an accountant for APC Bikes, a manufacturer of sturdy mountain bikes for intermediate-level bikers. The variable costs per bike include: Direct materials: Wheel/tyres $20.00 Components $70.00 Frame $50.00 Total direct materials $140.00 Direct labour $39.75 Variable overhead $75.00 Total cost per bike $254.75 You decide to create a budget variance analysis that reflects the actual volume of sales. The budgeted selling price is $800 (per bike). The budgeted fixed costs of manufacturing overhead are $20,200,000 and the budgeted support department costs are $32,956,430. Using the following template to create a budget variance analysis including the calculation of variances. Flexible budget Actual Variance Favourable / Unfavourable Bikes sold 113,500 113,500 Revenue ? $90,500,000 ? ? Production costs: Variable ? $29,492,408 ? ? Fixed overhead ? $19,400,000 ? ? Support department costs ? $37,565,337 ? ? Net income ? $4,042,255 Total variance ?  Notes: ? You are required to fill in the place with “?” only. ? The flexible budget is a budget that reflects a range of operations in which fixed and variable costs are separated to more accurately reflect the effects of activity levels on cost. ? Favourable variance is a variance in which actual revenues are larger than the budget, or actual costs are lower than the budget. ? An unfavourable variance is a variance in which actual costs are greater than budgeted, or actual revenues are less than budgeted. Tasks for Question 8: i. Complete the above flexible budget variance report ii. Based on the schedule, what is your opinion about the entity’s performance? iii. What actions are you going to take based on the flexible budget variance analysis?  9. What is good cash management? 10. What is cost-volume-profit (CVP) analysis and how is it used in decision making? 11. Scenario: APC Bikes, a manufacturer of sturdy mountain bikes for intermediate-level bikers. Due to the increasing popularity of cross-country cycling, the management of APC Bikes wants to produce a new mountain bike. After discussions with the sales and production teams, management has forecast the following information: Price per bike $800 Variable cost per bike $300 Fixed costs related to bike production $5,500,000 Targeted pre-tax profit $300,000 Targeted post-tax profit $210,000 Tax rate 30% Requir18 Jun 2019ed: Calculate breakeven in units and total revenue. Goods and services tax (GST), which was introduced in July 2000, is a broad-based tax of 10% of most goods, services and other items sold or consumed in Australia. Describe the THREE types of supplies under the GST legislation. 12. Scenario: Brian is running an ice cream shop. He paid $9.50 per hour for 3,950 hours of working in packing 40,000 buckets of ice cream. The standard labour rate is $8 per hour. How much is the direct labour price variance (i.e. the difference between the actual price for labour and the standard price)? Is the variance favourable or unfavourable? List the possible reasons for this variance? 13. When evaluating financial information systems, what factors will you need to consider? Part B – Written or Oral Questions Answer the following questions: 1. a. The accounting procedures of most businesses involve basic steps that are carried out in a set order. The flow of data through these procedures is known as the accounting cycle. List FIVE (5) basic steps that are included in the accounting cycle. b. The system used to process the information from source documents to the stage of financial reports is called the Double Entry System. One of the principles of double entry accounting is that each source document can be recorded in two parts: one debit and the other credit. What is the golden rule of double entry bookkeeping? 2. Depending on the size and complexity of the operation there can be many stakeholders in the budget setting process. List and briefly explain TWO (2) stakeholders who may be involved. 3. What is the cash flow? Give one example of how an organisation can control its cash flow. 4. a. The ABC Company collects cash from its sales as follows:

• 50% are cash sales, so the collection is at the time of sale.
• 40% in the month after the sale.
• 10% in the second month after the sale. Expected sales for the next six months are:

July August September $40,000 $50,000 $60,000 October November December $70,000 $80,000 $90,000 Required: Prepare a cash receipts budget for the period from October to December. The ABC Company Cash Receipts Budget For the period from October to December  Jul Aug Sep Oct Nov Dec Sales are $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 Collections:

• 1 month 40%
• 2 months 10%
• Collections from Accounts Receivable
• Cash Sales
• Total Receipts from Sales

1. The XYZ Company purchases for the next three months are expected to be as follows. All purchases are paid for in the same month. Ignore GST.

• January February March $10,000 $12,000 $14,000
• Operating expenses are forecasted as follows:
• Insurance (payable in March) $1,200 per year
• Telephone (payable in January) $600 (for 3 months)
• Electricity (payable in January) $300 (for 3 months)
• General Office Expenses $100 per month plus 1% of
• purchases
• Office Wages January $525
• February $1,613
• March $391
• General office expenses include $50 per month for depreciation.

Required: Prepare a cash payments budget for the period from January to March.

• The XYZ Company Cash Payments Budget For the period from January to March
• January February March Purchases
• Insurance
• Telephone
• Electricity
• General office expenses
• Office wages
• Total Cash Payments

5. When collecting data for analysis what are the two sources we can get data from?  6. How can data collected help an organisation determine the effectiveness of their financial management processes?  7. What are some factors that could affect a budget?  8. Budget/Financial Plan Exercise Using the following information work out the answers to the questions below:

• 160-seat restaurant
• Average spent at lunch $16.50
• Lunch seat turnover 80%
• Average spent at dinner $25.50
• Dinner seat turnover 70%
• Restaurant open for lunch 260 days a year
• Restaurant open for dinner 312 days a year

a. What are the projected sales for lunch? b. What are the projected sales for dinner? c. What are the projected total annual sales for the restaurant? 

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