Budget Management Analysis & Benchmarking
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o Determine specific strategies to manage budgets within forecasts.
o Compare five to seven expense results with budget expectations, and describe possible reasons for variance.
o Recommend three benchmarking techniques and identify those that might improve budget accuracy in future forecasts. Justify your choices.
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Solution Summary
Response contains a 7 page Word document with 790 words that includes a budget table and includes benchmarking technique recommendations.
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Please refer to the attached file for the response.
BUDGET MANAGEMENT ANALYSIS
To have a basis in illustrating the analysis of variance or difference between budgeted and actual figures, the budget of a sampled (unknown) company was utilized (http://www.smallbusinessnotes.com/business-finances/budgeting-systems.html).
The following example shows some of the common elements of a Budget.
Sample Company
Budget
January 1, xxxx to December 31, xxxx
Category Actual Budget Difference
Inflows
Net Sales 385,400 300,000 85,400
Cost of Goods
Merchandise Inventory, January 1 160,000 160,000 0
Purchases 120,000 90,000 30,000
Freight Charges 2,500 2,000 500
Total Merchandise Handled 282,500 252,000 30,500
Less Inventory, December 31 100,000 120,000 -20,000
Cost of Goods Sold 182,500 132,000 50,500
Gross Profit 202,900 168,000 34,900
Interest Income 500 700 (200)
Total Income 202,500 168,700 33,800
Expenses
Salaries 68,250 45,000 23,250
Utilities 5,800 4,500 1,300
Rent 23,000 23,000 0
Office Supplies 2,250 3,000 -750
Insurance 3,900 3,900 0
Advertising 8,650 9,000 -350
Telephone 2,700 2,300 400
Travel and Entertainment 2,550 2,000 550
Dues & Subscriptions 1,100 1,000 100
Interest ...
Education
- Bachelor of Science in Business Administration, University of the Philippines
- Master in Business Administration, Saint Mary's University
- Doctor of Philosophy in Education, University of the Philippines
- Doctor in Business Adminstration (IP), Polytechnic University of the Philippines
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