Purchase Solution

Budgetings: Break-even Analysis and Planning

Not what you're looking for?

Ask Custom Question

Budgeting is an important internal activity. Preparing budgets involve forecasting sales and estimating costs.

Prepare a flexible budget for next year for Lowe's. The budget needs to be realistic and based on corporate and economic trends.

Prepare budget based on absorption approach. Don't forget that the presentation of the information is important.

Set up the flexible budget at three levels - minimum, average and high revenues. Use the financial statements and to determine growth trends via computations.

In two pages explain the following in two plus pages:

Explain your estimates and prepare a flexible budget showing the low, the average, and the high revenues and adjust all other line items in the income statement to reflect the revised revenue assumptions.

What is the growth rate in sales for the past three years?

Are revenues and expenses growing at the same rate? What was the experience in the past few years?

What is the current growth rate in the economy?

How are the competitors doing esp. Home Depot?

Current interest rates and tax burdens.

Purchase this Solution

Solution Summary

Budgeting involving forecasting sales and estimating costs. A flexible budget is prepared for Lowe's. The budget is realistic and based on corporate and economic trends. It is prepared using the absorption approach.
It is set at three levels - minimum, average and high revenues. The statements use the financial data to determine growth trends.

Estimates are explained and a flexible budget showing the low, the average, and the high revenues and adjustment to all other line items in the income statement to reflect the revised revenue assumptions.

A comparison is made with Home Depot. Current interest rates and tax burdens are included.

Solution Preview

Good morning,

As you can see, the question has many aspects. I have answered all the questions and provided ...

Purchase this Solution


Free BrainMass Quizzes
MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.