1
HBAF: Manage Budgets and
Forecasts
Student Guide
FNSACC503A - Manage Budgets and Forecasts
Elements of competence

Prepare budgets

Forecast estimates

Document budgets

Monitor budget outcomes
FNS50210 Diploma of Accounting
HBAF – Manage Budgets and Forecasts Assignment- student – January 2012
Page 1
MODULE DESCRIPTION
This module is concerned with the preparation and management of complex budgets
and forecasts. It includes activities such as preparing operational and reporting budgets
for service and trading organisations.
When you have completed this unit you should be competent at explaining the
importance of budgets, identifying types of budgets and their contents, forecasting
budget figures, documenting budgets, analysing and interpreting budget results and
undertaking performance analysis.
To achieve the performance criteria listed in the unit of competency, you must be able
to; explain the budgeting process and its importance to a business, identifying the
components of different budgets, forecast estimates for inclusion in the budgets,
document different types of budgets, analyse and interpret budget outcomes and
evaluate budgets against actual results and prepareperformance reports.
LEARNING OUTCOMES
On completion of this module students should be able to:
- Prepare budgets knowing where and- how to seek the appropriate data
- Be able to forecast estimates based on an understanding of the environment that
exists
- Document budgets
- Monitor and review budget outcomes, comparing to actual and understanding
what variances are.
TEACHING PROGRAM
The program is of Eight (8) hours per week for five(5) weeks (forty hours).
COURSE REQUIREMENTS
To be assessed as competent for this unit of competency you must be able to do the
following:
(1) Demonstrate understanding of all learning outcomes
(2) Successfully complete and submit all tasks as requested
Assessment methods and tasks
FNS50210 Diploma of Accounting
HBAF – Manage Budgets and Forecasts Assignment- student – January 2012
Page 2
Methods of
assessment
Through consultation with industry, the following
assessment methods have been deemed appropriate for
this unit.
Case study Students will need to apply their ability, knowledge and skills in
preparing budgets, forecasting estimates, documenting and
monitoring budgets.
Class Test Students will need to apply their skillsand knowledge in
determining their responses to questions in order to
demonstrate an understanding in preparing budgets,
forecasting estimates, documenting and monitoring budgets.
ASSESSMENT DETAILS
Assessment Due
Assessment task 1
Case study
Week 3
Assessment task 2
Class Test
Week 5
Assessment Task 1
Case study
Submission details
Candidate’s
Name
Phone No.
Assessor’s Name Phone No.
Assessment Site
Assessment
Date/s
Time/s
The assessment task is due on the date specified byyour assessor. Any variations to
this arrangement must be approved in writing by your assessor.
Submit this document with any required evidence attached. See specifications below for
details.
Students are required to answer all the following questions given below.
Part a) Harwitt Nurseries have grown at a rapid rate. In the past, they have just operated
as a cash-in, cash-out business, with no consideration for a budget. But due to their
FNS50210 Diploma of Accounting
HBAF – Manage Budgets and Forecasts Assignment- student – January 2012
Page 3
growth, they are concerned that they are losing control. You are required to advise the
owners as to why they should use budgets for their business and what types of budgets
would be appropriate. Identify who would have inputinto the budget process and what
the benefits of budgeting will be.
Part b) Harwitt Nurseries sells a variety of plants, shrubs and lawn products. It is now 28
February. The following data is available:
A. Sales are budgeted at $280,000 for March and $340,000 for April (current year).
February sales were $250,000.
B. Collections from the sale of nursery items will be 75% in the month of sale and the
rest in the month following sale.
C. The cost of sales is expected to be 70 percent of sales revenue.
D. Sixty percent of the nursery products are purchased in the month prior to sale, and
40 percent are bought in the month of sale. Paymentfor nursery items bought from
suppliers is always in the month following the purchase.
E. The annual depreciation amounts to $240,000.
F. Other monthly expenses amount to $38,000 and arepaid for in cash.
FNS50204 Diploma of Accounting
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HBAF Manage Budgets and Forecasts Student Guide – January 2012 Page 4
G. The income tax rate is 30 percent; taxes are paid in cash.
The balance sheet on February 28 this year was as follows:
HARWIT NURSERIES
Balance Sheet
As at 28 February (current year)
Assets
Cash $ 20,000
Accounts receivable 62,500
Inventory (nursery products) 117,600
Property, plant and equipment 660,000
(Net of $540,000 accumulated depreciation)
Total assets $ 860,100
Liabilities
Accounts payable (nursery products) 187,600
Owners' Equity
Shareholders' equity 600,000
Retained earnings 72,500
Total liabilities and owners' equity $ 860,100
Required:
a. Prepare a cash receipts budget for March.
b. Prepare a budgeted income statement for March.
c. Prepare a cash disbursements budget for March.
d. Prepare a budgeted balance sheet as at 31 March.
Show your workings
REFERENCES
• Manage budgets and forecasts, tafevc publications,2006.
• Accounting in Australia. Hoggett & Edwards. Wiley publications.
WEEKLY SCHEDULE
WEEK TOPIC
1 • Introduction
FNS50204 Diploma of Accounting
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HBAF Manage Budgets and Forecasts Student Guide – January 2012 Page 5
• Objectives of budgeting
• Budget defined
• Business planning and forecasting
• Limitations of budgets
• Designing the budget
• Assessments set
2 • Types of budget
• Master budget and operational budgets
• Data for budget preparation
• Sales budget
• Production budget
• Budgeted profit and loss statement
• Advantages and disadvantages of budget
• Budget and variance
• Review of assessment progress
3 • Master Budget
• Budgeted statement of cash flows
• Budgeted balance sheet
• Performance appraisal
• Cash budgets
• The difficulties of sales forecasting.
• Human relations problems caused by budgets.
• Importance of budgeting to managers.
• Assessment task 1 due
• Review of assessment progress
4 • Budgetary control trading businesses
• Static budget reports
• Sales budget report
• Expenses budget
• Flexible Overhead Budget Report
• Responsibility accounting vs. budgetary control
• Types of responsibility centre
• Review of assessment progress
5 • Budget and planning
• Roles and responsibility of the budget process.
• Phases of the Budget Annual Cycle
• Resource Allocation Decisions
• Evaluating annual budget
• Managing budget
• Assessment task 2 due