4bus1043afb sema3 - pre lecture-1

7/28/2019 4BUS1043AFB SemA3 - Pre Lecture-1

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Accounting for Business4BUS1043

Forecasting and Budgeting and

Planning + Coursework

Pre Lecture Slides

Lecture 3 Sem A3

Week Commencing 17th October


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What we have learnt

Accounting Helps with Decision Making,

Planning and Control

The resources a business needs

What are sales and what are costs.

How break even analysis can help us.


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Today we will learn about

Forecasts

Budgets

Business Plans Coursework


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Business Scenarios & Time Horizons

Negotiating long term funding Working out next weeks bread requirements in a

sandwich shop

Ordering Christmas stock

Designing an aero engine Finding a factory

Negotiating annual contracts for raw materials

Setting annual sales bonus targets

Recruiting more retail managers Buying a contract for advertising space

Ordering in-flight food by an airline

Order the above in terms of time horizon from shortest to longest


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Time Horizons

SHORTER

LONGER


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What information would be useful to a

manager in each case?

Forecast which a short term prediction oftrade (or other future outcome)

Budget usually set annually for theforthcoming year

Strategic Plan covering the next 5+ years

Place the Business Scenarios which you haveordered by time horizon in the columns on thefollowing slide


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Forecast Budget Strategic Plan


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Forecasting - Ordering in-flight food by

an airline required information

Flight details e.g. times

Passenger numbers

Staff numbers

Split between economy, business and first

class

Dietary requirements


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In Flight Catering Example

You have the following information. Calculatehow many meals are requires and of which type.

3 flights

100, 150 and 230 passengers all economy

20 Staff

10% Vegetarian passengers

90% Non- vegetarian passengers

Answer ?


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Budgeting - Recruiting more retail

managers

Number of new outlets

Mangers being promoted

Managers leaving

Percentage of managers who are recruited

and who complete training


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Recruiting managers - Relevant Data

10 new outlets

8 managers will be promoted

6 Managers will leave 75% of managers complete training

How many new managers should you budget torecruit?


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Strategic Planning Finding a factory

Would include:

Long term production strategy

Location of markets

Location of resources employees, raw materials

Development grants

Designing an aero engine . . . .


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Usefulness of Forecasts

Use most recently available information

Use most relevant information for the decision

being made

Can be prepared by the person best placed to

estimate the short term future

Are limited to resources which can be

influenced in the short term


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Usefulness of budgets

In general budgets are used for the followingpurposes:

To promote forward thinking and identify short termproblems

To facilitate coordination among various sections of anorganisation

To motivate managers to better performance

To provide a basis for control To provide a system of authorisation for managers to

spend up to a particular limit


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Effective budgetary control

Budgets are prepared to affect the attitudes and behaviours ofmanagers and to provide direction for managerial decision making

To make full use of the budgets potential for control the followingconditions should be met:

Senior managers should adopt a serious attitude to the system

There should be clear distinction of responsibilities Budget targets should be challenging but realistic

There should be well established data collection, analysis, andreporting routines

Reports should be case (manager) specific

Reasonably short reporting periods should be adopted Variance reports should be available to managers within short time

Timely action should be taken in order to bring activities undercontrol


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Coursework Presentation

Evaluation of a business scenario


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Our assignment

You are an external consultant to a restaurant

owner and you need to prepare a report to

help him with:

Decision Making

Planning

Control


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What should be covered on your report?

1. The benefits to a business of using accounting techniques

2. Description of the business from an accounting perspective

Description, illustration and benefits of accounting technique

which will you recommend will help with:

3. Decision Making e.g. What price should be charged for daily

lunch specials?

4. Planning e.g. What is an annual budget and how will it help?5. Control e.g. What information should be reviewed regularly?

6. Limitations to your recommendations


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4BUS1043 Accounting for Business - Assessment and Grading Criteria

Marks A grade (70%+) B grade (60% - 69%) C grade (50% - 59%) D grade (40% - 49%) Fail

Criteria

Introduction; To include the

benefits to a business of usingaccounting techniques

10%

Excellent explanation of the advantages

of using accounting techniques as

means to aiding a business with

decision making, planning and control.Explanation backed with wide use of

relevant theory.

Very good explanation of the

advantages of using accounting

techniques as means to aiding a

business with decision making,planning and control Very good use

of relevant theory.

Demonstrates a good

understanding of the advantages

of using accounting techniques as

means to aiding a business withdecision making, planning and

control with reasonable discussion

of theory.

Adopts a descriptive approach to the

material with limited use of relevant

theory.

Demonstrates little or no

understanding of material.

Description of the

business from an

accounting

perspective

10%

Excellent description of the business

model in terms of sales, variable costs,

fixed costs, and capital requirements.

Provision of relevant examples of types of

costs being considered.

Very good description of the business

model in terms of sales, variable costs,

fixed costs, and capital requirements.

Provision of some examples of types of

costs being considered.

Good description of the business

model and provision of examples of

costs.

Description of the business model

showing limited understanding and

limited use of examples of costs.


understanding of the nature of

costs.

Description, illustration

and benefits of

accounting techniques

which you recommend

will help with decision

making

20%

Excellent a)description of and

b)illustration of the benefits of

appropriate accounting techniques which

will help the business with its decision

making.

Very good a) description of and


appropriate accounting techniques

which will help the business with its

decision making.

Good a)description of and




decision making.

Demonstrates an attempt to describe

and to illustrate the benefits of


will help the business with its decision

making

Very little or no attempt to to

describe and to illustrate the

benefits of appropriate accounting

techniques which will help the

business with its decision making


and benefits of


which you recommend

will help with planning

20%

Excellent a) description of and



will help the business with its planning.

Very good a)description of and




planning.





planning.




will help the business with its planning.

Very little or no attempt to




business with its planning.


and benefits of


which you recommend

will help with control

20%

Excellent a)description of and



will help the business with control.

Very good a) description of and



which will help the business with

control.




which will help the business with

control.




will help the business with control.

Very little or no attempt to to




business with control.

Conclusion: To include

limitations to your

recommendations

10%

Excellent evaluation of the role,

importance, and limitations of

accounting techniques in helping with

the decision making planning and

control in a business. Excellent use of

relevant theory.

Very good evaluation of the role,


accounting techniques in helping

with the decision making planning

and control in a business. Very good

use of relevant theory.

Good evaluation of the role,


accounting techniques in helping

with the decision making planning

and control in a business. Good

use of relevant theory.

Attempts to present and discuss the

role, importance, and limitations of

accounting techniques in helping with

the decision making planning and

control. Weaknesses may exist in

using theoretical concepts.


understanding of material.

Structure and Presentation 10%

Excellent grammar, presentation &

report structure, with numbered

paragraphs, list of contents

&appendices. Articulate & fluent

academic writing style with ideas cross

referenced. No significant grammatical

/ spelling errors.

Very good grammar, presentation &

report structure, with numbered

paragraphs, list of contents

&appendices. Fluent academic

writing style. Very few grammatical

errors & spelling mistakes.

Good, clear presentation & report

structure, use of numbering &

appendices. Writing is mainly

clear but some spelling &/ or

grammatical errors.

Satisfactory but basic report structure.

Not always written clearly & has

grammatical & / or spelling errors.

Weak report format with limited

or poor structure. Muddled work

with many spelling & / or

grammatical errors.


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When are you going to submit your report?

Assignment due 21st November

How to submit it?

One electronic copy via studynet

How to be successful?

Study smart or hard (the choice is yours), ask

questions, and follow the guidance below


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You will be assessed on:

Coverage and application of relevant theory

Explaining, illustrating and describing benefits of

techniques Evidence of reading and research (including

sourcing and referencing using the Harvardreferencing system throughout, accompanied bya bibliography)

Overall structure and presentation of report(including requirements listed below)


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Use of language when writing a report

A report should be written concisely in a business likemanner

Headings and subheadings needed to effectively presentyour views

Use of third person is recommended, avoid I... or we... Use plain English, avoid words you dont understand

Avoid long, complicated sentences, as it makes it easy tomiss the point you are trying to make

Make sure you develop a new point using a new paragraph

Make sure you support your views using references


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Layout of your assignment

The assignment should be in report format

Use proper headings/subheadings, an easy way towork around it is to use each issue you need to addressas a separate heading

You should use 1.5 or double line spacing and font sizeno less than 12

Your word count is 1,200 words excluding any graphs,tables, calculations, appendixes, and your reference list

You should display you full name, your ID number, thename of the module, and the word count on theFRONT page of the report


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Assignment Support

Academic Skills Unit On studynet: Click on Student support and scroll down How to write a report

Harvard Referencing

Further Support

Learning Resources on the Studynet Homepage e.g. How to read an

academic journal

Academic Skills Unit

Office Hours

Tutorial week commencing 31

st

Octoberafter the In-class test Drop-in workshop


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In big writing!

Direct quotations must be very brief

Wikipedia and open access sites are not an

acceptable academic source

We will be using Turnitin

Do not cut and paste chunks of text, copy or

cheat in any other way!


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Tutorial Preparation

1. You are manager of a DIY store. You need to forecast your salesfor the coming Easter weekend. Easter was at a different time lastyear. What information will help you to produce an accuratefigure?

2. Prepare a six- month budget See studynet

3. Critically discuss these statements, explaining any technical terms.a) A budget is a forecast of what is expected to happen in a business

during the next year.

b) Monthly budgets must be prepared with a column for each monthso that you can see the whole year at a glance, month by month.

c) Budgets are OK but they stifle all initiative. No manager worth

employing would work for a business that seeks to control throughbudgets.


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Preparation for Next Week

Controlling and Comparing

Essential Reading: Burgess Chapter 6 Pages

105-116, Atrill & McLaney Chapter 9 Page

280-288, 298-299, 312-319

Additional Reading: Remainder of Burgess

Chapter 6 & Atrill & McLaney Chapter 9

4bus1043afb sema3 - pre lecture-1

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