Budget practices and techniques
Introduction
This assessment will give you the opportunity to construct a complete budget for the manufacturing operations of a fictional company called the Spicer Corporation. In doing so, you will practice analyzing budget practices and techniques.
Demonstration of Proficiency
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies through corresponding scoring guide criteria:
Competency 2: Analyze budgeting practices in organizations.
Explain how the component budgets function within the complete annual budget.
Competency 3: Apply appropriate budgeting techniques for planning, executing, and controlling.
Create a complete annual budget.
Competency 4: Apply quantitative models to create and manage budgets and forecasts and evaluate budget performance.
- Create the sales budget.
- Create the purchasing budget.
- Create the payments budget.
- Create the cash receipts budget..
Competency 5: Communicate in a manner that is professional and consistent with expectations for members of the business professions.
Communicate in a manner that is professional and consistent with expectations for members of the business professions.
Scenario
Cash budgets forecast cash needs to achieve operational goals, especially in terms of expected financing. For this assessment, you will act as a controller at a manufacturing company called the Spicer Corporation and your task will be to prepare a cash budget and an associated memo.
Your Role
You are a controller working for the vice president of finance at a manufacturing company called Spicer Corporation.
Requirements
The vice president has requested you create a cash budget (5 pages) for the coming year:
Use the Cash Budgeting Template [XLSX].
Include a supplement schedule for cash receipts for the coming year.
Assume management wants to maintain a minimum cash balance of $50,000.
When you complete the cash budget, include the component parts:
- Sales budget.
- Purchasing budget.
- Payments budget.
- Cash receipts budget.
In addition to the cash budget, the vice president has also requested that you prepare a memo to management (3 pages) that explains the purpose of a cash budget, its relationship to operational goals, and the process you performed to create it. As part of the memo, identify at least three key aspects of the current cash budget that management should note. For each key aspect, be sure to discuss how the overall cash budget will be impacted if there is a change in the expectation.
Use the Memo Template [DOC] to structure your memo.
Deliverable Format
Since the vice president of finance has requested these documents, you should make the cash budget and associated memo as clear, well-organized, and readable as possible. The vice president has requested the memo for management be 3 pages so that you have enough space to provide some scholarly and/or professional context.
Communication: Communicate in a manner that is scholarly, professional, and consistent with the needs and expectations of senior corporate leadership and other stakeholders. For this scenario, assume the vice president of finance expects original work, critical thinking, and scholarly sources. Your writing must be free of errors that detract from the overall message.
The memo is a professional document and should therefore follow the corresponding MBA Academic and Professional Document Guidelines, including single-spaced paragraphs.
Resources: Incorporate at least two resources that are scholarly and/or professional. So that your imaginary vice president of finance can locate more information about cash budgeting, include a reference page at the end of your report.
Budget length: According to template.
Faculty will use the scoring guide to review your deliverable as if they were your immediate supervisor. Review the scoring guide prior to developing and submitting your assessment.
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