Manage budgets and financial plans Assignment

Assessment 1 - Project

This assessment project is to be completed in addition to the learning and assessment activities you complete in class. The project is designed to assess the knowledge and skills you have to undertake financial management within a work team in an organisation.

If you are not sure about any aspect of the assessment or would like to discuss your particular needs, please speak to your trainer. Your trainer will tell you the date you need to submit your assignment.

All parts of the project will be given to you at the same time. You need to complete all parts and submit them together by the due date. This will be in the last week of classes for the unit.

This project assignment is to be completed using the "Syntac Garments Company Australia" case study.

Your assignment must be typed (in 12 point type on A4 paper) and attached to the front page of this assessment document, which you need to complete as an Assessment Cover Page.

Part 1 -

You have been provided with a case study on an organization - Syntac Garments, provided in the Additional information at the end of this project. You will be using this information to help you complete the tasks given in this project.

Task 1-

Using the case study on the Syntac Garments, you are going to review the master budget and cost centre budgets prepared by the company accountant. You are required to meet with your Sales General Manager (your assessor in this case) and discuss the budget projections to see if they are achievable, accurate and fair.

Information you are aware of includes:

• Sales in the first quarter (Q1) second quarter (Q2), and the fourth quarter (Q4) are generally 30% less than quarter 3 (Q3).
• Sales in Q2 depends on completion of 90% of repair and maintenance
• Commission negotiated with members of the sales team is now at 2.5%

You will be required to:

• Identify at least two issues for clarification
• Negotiate at least two changes

Task 2-

It has come to the managing director's attention that due to the current economic climate, sales volume may be 20% below target this financial year. The MD is worried that this may severely impact profit projections. The company can accept as much as 10% variance in profit projections; however, more than this could severely affect the company's ability to pay obligations and invest. Reliable data to determine whether the risk has eventuated should be available my mid Q2, when sales data for the company's product are in. As a special project, the MD asked you to perform a risk assessment and develop a contingency plan to manage the risk of sales falling 20%. As per the company's policy you should use the contingency template.

Part 2-

Using the information given in Additional information at the end of the project, and the information in part 1 you are now going to access and communicate the details of the budget to team member (your assessor in this case).

Task 1-

You have determined that you will need to access budget information to explain to your team. You will explain the overall financial objective of the business, provide an overview of the budget and explain how the budget translates to expense allocations for the team.

You have also determined that one of the team members (your assessor) will be responsible for tracking expense and petty cash throughout the financial year. To meet organisational needs, this duty will need to be performed in accordance with the policies and procedures. You have determined that expenses will need to be divided equally and tracked by quarter. The team member will need to develop a spreadsheet to keep track of actual expenditure by account. To help you control expenses, the spreadsheet will need to provide an ongoing tally of expense by account. The team member's skills include basic accounting. The team member needs to be informed of the company's policies and procedure for petty cash. The team member is familiar with Microsoft Excel but does not know how to use formula and functions to sum columns or rows of figures.

a. Access the budget information and provide the overall business objective, an overview of the budget with expense allocations to your team member (your assessor).

b. Prepare a training session plan. The outcome of this session is to train the team member to produce spreadsheet to meet management requirement. Include activities /elements to instruct, practice and test

c. Meet with the team member (assessor) to coach/train in the role:

• Explain budget relevance to team member's accountabilities
• Use appropriate coaching techniques or models such as GROW
• Train learner in required spreadsheet techniques.

Part 3-

Using the information given in Additional information at the end of the project, and the information in part 1 and 2 you are now set budgets and monitor budgetary performance for the organisation. While completing these tasks you have to consider organizational protocols.

Task 1-

The managing director asked you to implement a process to monitor expenditure and income. He has asked you to prepare a spreadsheet to capture and compare actual income and expenditure to budgeted figures. Your spreadsheet must contain columns for each of the four quarters of the financial year. You are required to gather data from the relevant managers (your assessor) to complete the budget variation report.

The report should confirm to the organisational requirements in policies and procedures and contain:

• Columns to show actual account values
• Absolute variation
• Percentage variation

a. Prepare a budget spreadsheet.

b. Prepare a budget variance report.

Task 2-

Consider the information from Part 1 Task 2 above. Consider the contingency plan and the implementation plan for the contingency given under the Additional Information. You have already implemented a portion of the contingency plan, namely the monitoring of budget performance in the variation report you have prepared. You should now analyse the report to determine the effectiveness of the contingency plan and its implementation.

You have received the following feedback from the team members

• Full-time workers and sales people resentful of time wasting and distracting contract employees
• Overtime not used but employees resentful of suggestion it might not be approved if needed
• Training suited the needs of many sales team members but was not relevant about half
• Sales team members were happy with the incentives program and tried hard to make sales in the third quarter (Q3); however they were also resentful at the threatening tone of emails and soon lost enthusiasm
• Effect of one-day training wearing off
• 50 percent of direct wages costs are attributable to short-term contract employees whose contracts have expired and how are no longer needed
• Employees concerned about lack of attention paid to wastage; water; electricity; paper; raw materials
• Employees feel left out of budgetary decision-making in general.

The MD would like you to submit a revised contingency plan and contingency plan implementation to bring income and expenses under more effective control.

a. Prepare a modified contingency plan and modified implementation plan.

Part 4-

Using the information given in Additional information at the end of the project, and the information from scenarios below, you will respond to a number of scenarios tasks. You will collect and analyse financial data and make recommendations to improve existing processes. Your will also create a plan to implement and monitoring solutions.

Task 1-

Syntac is considering of manufacturing a new range of latest style clothing in China.

• The factory in China has a capacity to make 8000 pieces of clothing per week.
• Syntac's strategic goal is to generate a pre-tax profit of $lmillion for the next financial year from its Chinese operations alone.
• Customers will pay on an average of $100 per item
• Chances are of increasing a capacity of $10,000 pieces per week.
• It aims to make only top end clothing
• Current variable cost per piece is $50
• Fixed costs at this stage are $1,280,000

a. You are now going to work out and show the following calculations:

• The number of pieces of clothing at current variable cost that would need to be produced to achieve profit target.
• At current manufacturing capacity what the variable costs per piece would need w be to achieve profit targets.

b. In your response document, make a recommendation based on this analysis. This document report must be supported by organisational needs and analytical techniques used.

C. In the report also include two sources of information that helped in the completion of this task.

Task 2-

Consider the recommendation made in Task 1 above, develop an action plan to implement and monitor the recommendation. You must include appropriate activities, monitoring, timelines and accountabilities.

Task 3-

Soon you will need to prepare a business activity statement (BAS) for the first quarter on the current financial year.

Complete the GST budget to anticipate GST liability. Your assessor will provide you the work sheet.