My principal property practitioner has requested that I prepare the operational budget for your office for the

Fantastic news! We've Found the answer you've been seeking!

Question:

My principal property practitioner has requested that I prepare the operational budget for your office for the next six months - July to December. On the breakdown below he has provided you with the actual budget and spending figures for the previous six months. In my brief, he has also provided you with possible scenario's which are expected to occur within the next 6-month budget period.

Study the information provided and then I have to complete the questions A - G. My brief: Influencing factors in the new budget calculations: - Subscriptions and registration fees are payable in January of each year - Two staff members are leaving the company employment and their positions will not be filled again. Their salary details are Paul R 2 850-00 pm and Janette R 3 000-00 pm. - The office rental contract expires in Oct and per the agreement the rental is subject to an annual increase of 7%. - Salary increases have been negotiated at 6% and will come into effect on 1 July. - An additional computer station is planned and will have full internet and e-mail facilities. - Your principal is concerned with the sales figures and is planning a regional golf day to promote the company and your services. Your office will be funding the full event. Actual budget and expenditure figures for previous six months:

Item	Budget	Actual
Sales	520 000	425 000

Expenses
Office Rental	27 000	27 000
Telephones	11 400	16 800
Stationary and printing	6 550	4 350
Staff refreshments	4 985	6 378
Equipment rental	5 300	5 300
Salaries and wages	125 000	156 000
Insurance	29 850	32 698
Item	Budget	Actual
Promotions	9 500	2 600
Registration fees	6 300	6 300
Subscriptions	2 800	2 550
Fuel expenses	6 800	9 550

A - Study the figures and details provided and complete the new budget as requested. B - Indicate your projected profit margins per your new budget. C - Make recommendations on control methods to your principal regarding the previous expenditures and the adjustments you have made to the new budget to ensure optimisation of profits. D - Indicate in your report which short, medium and long term factors you had considered during your budget preparation. E - I have to draft a memorandum to other employees explaining the relationship between cost and revenue and the effects that low revenue has on a budget. Support your explanation with simple relevant mathematical proof, for example: you planned a weekend promotion - the advertising cost amounted to A) R10 000. Through this promotion, you sold B) 5 units @ R1000 each. Therefore A (5 x 1000) = advertising cost per unit and total of B - A = profit / loss. F - By analysing the previous budget and actual expenditure figures, what do you think would have made a difference to the company income? G - Which computational tools did you use during this exercise and how did they assist you with the task?