Contents
2INTRODUCTION �
3Explain the purpose and nature of the budgeting process which should normally be taken in the preparation of budgets for subsidiary 'XYZ'. (3.1) �
4Select appropriate budgeting methods for subsidiary 'XYZ' and its needs. Prepare budgets (from January 2012 to June 2012) according to the chosen budgeting method based on the given information in the scenario and also prepare a cash budget. (3.2, 3.3, 3.4) �
12Calculate variances, identify possible causes and recommend corrective action. Prepare an operating statement reconciling budgeted and actual results (4.1, 4.2) �
14Write a memo and report findings to management in accordance with identified responsibility centres based on the above findings (4.3) �
15Conclusion �
16Reference �
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INTRODUCTION
Nowadays, most companies have to face with many difficulties to control their business activities. The data from Quanta Computer subsidiaries modified for the assessment purposes; however the situation is realistic with possible survival and expansion of a company in the market.
Figure 1
Figure 2
Figure 3Company need to know how many its products or service cost and how these cost might change in response to make decision.
Through the purposes and nature of the budgeting process, we can know why people need to prepare a budget. Then, we will conduct a budget preparation for company via income statement budget and cash budget.
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Explain the purpose and nature of the budgeting process which should normally be taken in the preparation of budgets for subsidiary 'XYZ'. (3.1)
Budget: is a key management tool to help plan, monitor and control the funding for a project or an organization. The content of the budget is estimated revenues and expenditures a certain period of a projector organization.
There are seven steps to plan and control the budget:
Step 1: Identify objectives: The sales budget will be set up based...