Details of Assessment
Term and Year 1, 2017 Time allowed Week 2, 3, 4, 5, 6, 7
Assessment No 1 Assessment Weighting 60%
Assessment Type Portfolio of activities (Written)
Due Date Week No. 7 Room TBA
Details of Subject
Qualification BSBFIM501 Diploma of Leadership and Management
Subject Name Financial Management
Details of Unit(s) of competency
Unit Code (s) and Names BSBFIM501A Manage Budgets and Financial Plans
Details of Student
Student Name
College Student ID
Student Declaration: I declare that the work submitted is my own, and has not been copied or plagiarised from any person or source. Signature: ___________________________
Date: _______/________/_______________
Details of Assessor
Assessor’s Name
Assessment Outcome
Results
0 Satisfactory 0 Not Satisfactory
Marks
FEEDBACK TO STUDENT
Progressive feedback to students, identifying gaps in competency and comments on positive improvements:
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Student Declaration: I declare that I have been assessed in this unit, and I have been advised of my result. I also am aware of my appeal rights and reassessment procedure.
Signature: ____________________________
Date: ____/_____/_____ Assessor Declaration: I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I have provided appropriate feedback
0 Student did not attend the feedback session.
Feedback provided on assessment.
Signature: ____________________________
Date: ____/_____/_____

Purpose of the Assessment
The purpose of this assessment is to assess the student in the following learning outcomes: Satisfactory
(S) Not yet Satisfactory
(NS)
Plan financial management approaches
Implement financial management approaches
Monitor and control finances
Review and evaluate financial management processes
Assessment/evidence gathering conditions
Each assessment component is recorded as either Satisfactory (S) or Not Satisfactory (NS). A student can only achieve competence when all assessment components listed under Purpose of the assessment section are Satisfactory. Your trainer will give you feedback after the completion of each assessment. A student who is assessed as NS (Not Satisfactory) is eligible for re-assessment.
Resources required for this Assessment
• Upon completion, submit the assessment to your trainer along with assessment coversheet
• Refer to the subject notes on E-Learning prior to responding to the tasks/questions
• Any additional material will be provided by Trainer
Instructions for Students
Please read the following instructions carefully
• This assessment has to be completed 1 In class 1 At home
• The assessment is to be completed according to the instructions given by your assessor.
• Feedback on each task will be provided to enable you to determine how your work could be improved. You will be provided with feedback on your work within 2 weeks of the assessment due date. All other feedbacks will be provided by the end of the term.
• Should you not answer the questions correctly, you will be given feedback on the results and your gaps in knowledge. You will be given another opportunity to demonstrate your knowledge and skills to be deemed competent for this unit of competency.
• If you are not sure about any aspects of this assessment, please ask for clarification from your assessor.
• Please refer to the College re-assessment and re-sit policy for more information.

Week 1:
Task 1: Give some examples for the following costs: (2 Mark)
Direct cost
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Indirect cost
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Fixed cost
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Variable cost
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Step cost/Semi variable cost
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Task 2: Classifying costs and Monitoring process for actual expenditure:
Part a: (2 Mark)
A company incurs the following costs (as shown under ‘Workings’) during a manufacturing process. Identify them with one of the cost elements (direct material, direct labour or other costs) by ticking the appropriate column. Also indicate by a tick whether it is a direct or an indirect cost.
Workings:
Costs Direct material Direct labour Overhead/
Other cost Direct cost Indirect cost
1 Raw materials
2 Electricity
3 Foreperson’s salary
4 Telephone calls
5 Machine operators’ wages
6 Rent and rates for factory premises
7 Insurance on machinery
8 Maintenance materials
9 Cleaners’ wages
10 Gas
11 Telesales wages
12 Nuts and bolts
Part b:
i) Complete the following variance report. (1 Mark)
PRODUCT BUDGETED
SALES ACTUAL
SALES VARIANCE
Qty $ Qty $ Qty $
Product X 100 20 000 120 26 000
Product Y 150 18 000 160 17 600
Product Z 200 40 000 190 36 100
Total
ii) Complete the missing figures in the following cost of production report for product X.(1 Mark)
Cost of production report
Budget
$ Actual
$ Variance
$
Direct material 8 950 650(U)
Direct labour 17 900 18 260
Factory overhead 6 420 120(F)
Part c: (2 Mark)
From the information given, calculate and write down all possible variances (units or dollar amounts as applicable) in the variance columns stating whether they are favourable (F) or unfavourable (U).
Budget Actual Variance
(Total)
Qty $
Sales – Product A Units 900 950
Sales – Product B Units 1 200 1 180
Sales – Product C Units 1 500 1 650
Sales – Product A $/Unit 10 9
Sales – Product B $/Unit 12 14
Sales – Product C $/Unit 15 16
Production – Product A Units 1000 1 100
Production – Product B Units 1 200 1 320
Production – Product C Units 1 800 1 780
Raw material X $ 5 700 6 875
Raw material Y $ 10 500 10 230
Raw material Z $ 7 200 7 476
Task 3a: Dissemination of budgets and financial plans (1 Mark)
List the ways by which dissemination of budget and action requirements takes place.
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Task 3b: (1 Mark)
Give some examples of budgets, and explain which parties these should be discussed with.
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Week 2: Case Study – Task 4 (2 Mark)
Performance indicators
Rural fire services consist of a number of volunteers who are drawn from the local communities. These volunteers are trained by the State’s fire brigade. They are called upon to assist the permanent staff in case of emergency. Depending on the training and their capability they are provided with protective clothing where the well trained volunteers get a full set of uniform and the beginners get an identifying cap. These volunteers also help in fund raising activities. The money collected goes into funding the unit.
Performance indicators linked to the activities of an organisation are necessary for the organisation to assess its performance. The performance indicators used by commercial organisations are motivated by the need to make a profit for them to survive and provide returns to the investors. The performance indicators for not-for-profit organisations are somewhat different to those of commercial organisations. Not-for-profit organisations are those organisations that provide services for organisation members or for other people but not interested in profits. This is mainly due to the fact that these organisations survive on grants and donations. Examples of such organisation include charities, churches and political parties. Some not-for-profit organisations are substantial organisations such as the International Red Cross that has a large budget and complex operations while others such as local sports teams are run for a local community.
What might be some of the performance indicators used to assess the performance of such units?
You might investigate such a unit or look at other not-for-profit groups and review how they go about measuring performance.
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Task 5: Performance Indicators. (2 Mark)
Explain whether the items in the ‘Workings’ area are financial or non-financial performance indicators.
Workings:
Items Financial Non-Financial Reason
1 The absenteeism in the paint shop of Rubber Toy Manufacturing Company caused a loss of 28 productive hours in the past week.
2 The gross profit to sales ratio of the cosmetic section of XYZ Department Stores was 60% for May.
3 There was one reported accident in the cutting section of Dale Furniture Manufacturers during the month of June.
4 Accounts receivable as at 31 December was 15% of the sales for the year.
5 Net profit to sales ratio of XYZ Department Stores was 8% for May.
Task 6: Classification of work description: (1 Mark)
Identify the following as Trading (T), Manufacturing (M) or service (S) business.
(a) a grocery store ( )
(b) a furniture wholesaler ( )
(c) a legal firm ( )
(d) a plumber ( )
(e) a dentist ( )
(f) a bakery ( )
(g) a food processing factory ( )
(h) a restaurant ( )
(i) a super market ( )
(j) a doctor’s surgery ( )
(k) a shoe store ( )
Task 7: Fees Budget (1 Mark)
The Suburat Medical Centre, located in an affluent suburb, provides a 24-hour medical service to the
residents. A recently recruited employee has been asked to help the management with the
preparation of a fees budget for January 20X1and is provided with the following information:
• Forty-five per cent of patients pay in cash when services are performed, and those insured claim refunds from their medical funds. The fee charged to the patients is $25.
• Fifty-five per cent of the patients are accepted on bulk billing, where the fee charged is $19.
• The number of patients expected for consultation/treatment in January 20X1 is 1700.
Show how the fees budget will be prepared.
Workings:
Suburat Medical Centre
Fees budget – January 20X1
$
Fees receivable in cash
Fees receivable from bulk billing
Total fees
Task 8: Sales Budget and production budget (3 Mark)
The projected sales in units for Parker and Company for the month of January 20XX is
12000. The inventory of finished goods on 1 January 20XX was 6,000. The company expects
the ending inventory for January to be 7000 units and expects to maintain it at that level for
the coming months. The sales for February and March are each expected to increase by 10%
over the previous month. Prepare a production units budget for these three months.
Workings:
Parker and Company
Sales budget (units) – 20XX
January February March
Sales
Parker and Company
Production budget – 20XX
January February March
Desired ending inventory
Add: Sales for period
Less: Opening inventory
Production requirement
Task 9: Expense budget (3 Mark)
Prepare a selling expense budget for the month of February 20XX for Dajan& Co. The sales for
February are expected to be $120000. The bases to be used for budget purposes are as follows:
• Annual fixed expenses are allocated equally to each month.
• Sales staff salaries are equal to 4% of sales.
• Depreciation of sales vehicles is an amount of $18000 per annum.
• Sales staff insurance is 2.5% of total sales staff salaries.
• The advertising budget is currently $19200 per annum.
• Sales vehicle maintenance costs the organisation 2% of sales revenue.
• Freight out is calculated at 0.65% of revenue.
Workings:
Item $
Salaries
Depreciation
Staff Insurance
Advertising
Vehicle Maintenance
Freight
Total
Week 3:
Task 10: Preparing P & L and Balance sheet using Spreadsheet: (3 Mark)
Complete the following P & L and Balance sheet.
P & L Statement IBC Pty Ltd
July 1, 2013 to June 30, 2014
Gross sales 346,400
Les: sales returns and allowances 1,000
A. Total Business Income
Cost of Goods Sold:
Beginning Inventory, July 2012 160,000
Add:
Direct material 90,000
Direct labour 50,000
Factory overhead 2,000
Less:
Closing inventory, June 2013 100,000
B. Cost of Goods Sold
C. Gross Profit (A-B)
Expenses
Salaries 68,250
Utility bills 5,800
Rent 23,000
Office supplies 2,250
Insurance 3,900
Advertising 8,650
Telephone 2,700
Travel and entertainment 2,550
Dues and subscriptions 1,100
Interest paid 2,140
Commission paid 1,250
Owner’s drawings 11,700
D. Total expenses
Net Profit (C-D)
Balance Sheet IBC Pty Ltd
July 1, 2013 to June 30, 2014
Assets
Cash 8,450
Accounts Receivable 65,000
Inventory 19,550
Land 65,000
Buildings 32,500
Plant & equipment 32,500
Less: Accumulated depreciation (16,900)
Goodwill 22,100
A. Total Assets
Liabilities
Accounts payable 44,200
Bank overdraft 1,000
Short term loans 15,000
Mortgage 35,000
B. Total liabilities
C. Net Assets (A-B)
Owner’s equity
Opening equity 66,500
Retained profit 66,500
D. Total owner’s equity
Task 11: (3 Mark)
Prepare a Profit & Loss Statement and a Balance Sheet from the following Trial Balance.
Trial Balance of Marco’s Café
As at 30 June 2014
Account Name Debit
$ Credit
$
Cash at bank 20 000
Accounts Receivable 134 000
Inventory 40 000
Prepayments(Asset) 3 000
Plant and equipment (P & E) 430 000
Accumulated Depreciation-(P & E)
(put this amount as negative under asset) 20 000
Accounts Payable 71 000
Accrued Expense(Liability) 3 000
Loan from bank 29 000
GST payable 10 000
Capital 100 000
Retained Profit(OE) 100 000
Reserves(OE) 10 000
Long Term Loan 150 000
Sales 550 000
Purchases 320 000
Electricity 15 000
Rent 41 000
Advertising 27 000
Interest Expense 13 000
1 043 000 1 043 000
P & L Statement
As at 30 June 2014
$ $

Balance sheet
As at 30 June 2014
$ $

Week 4:
Task 12: Sources of Finance (1 Mark)
You are owner of a manufacturing company. Due to increased competition in the marker you are planning to open a new product line. This involves a certain amount of investments and requires capital. You are planning to approach financial institutions to apply for financing. What are the different sources you can manage finance for your business?
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Task 13: Clarification of budgets and financial plans: (1 Mark)
In a retail environment where floor staff may have scope to vary the price of products sold what
information might the store management need to pass to various sales work groups in respect to
issues such as cost and discounts that might impact on sales budgets being achieved?
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Task 14: Financial plans and negotiation for changes (1 Mark)
What are the potentially positive impacts of consultation and agreement on budget goals between
management and staff responsible for achieving required budget goals in respect tonsuring budget
goals are met?
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Task 15: Risk management and Prepare Contingency Plan
Part a: What is risk management? Explain the various methods available for treating risk.(1 Mark)
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Part b: What is involved in selecting the appropriate contingency plan? (1 Mark)
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Task 16: Risk Management (1 Mark)
Can risks be avoided in an organisation? Explain your answer.
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Task 17: Succession planning: (1 Mark)
Describe the steps involved in ‘Succession Planning’.
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Week 5
Task 18: GST Calculations (3 Mark)
John is the owner of a fish and chips shop in Parramatta. His total sale for the month of February was $24,000 including GST. His purchase was $18,000 for the same month. Calculate the following.
(i) GST received
(ii) GST paid
(iii) Net GST payable
Task 19: GST and Cash Flow Statement (2 Mark)
A company forecasts the following transactions during the next financial year which will affect its
cash flow. (All ATO dues and ATO credits are expected to be settled during the year.)
$
Cash sales, 10% GST not included
Credit sales for year, including 10% GST
Cash receipts in respect of credit sales — budget year
Cash receipts in respect of credit sales — previous year
Cash purchases, 10% GST not included
GST payable to ATO
GST input credit from ATO
Wages
Other payments, including 10% GST 80 000
176 000
140 800
11 000
90 000
12 000
24 000
120 000
33 000
Prepare a budgeted cash flow statement assuming that the opening bank balance was $30,200.
Workings:
Cash Receipts: $ $
Cash sales
GST receipts on cash sales
Credit sales - budget year
Credit sales - previous year
Total Cash receipts
Cash Payments:
Purchases
GST payments on cash purchases
Wages
Net GST payable to ATO
Other payments
Total Cash Payments:
Cash surplus/(deficit)
Opening bank balance
Closing bank balance

Task 20: Preparing Sales Budget (3 Mark)
Gardening tools Pty Ltd manufacture and sell lawn mower and water pump. The production cost is as follows:
Lawn mower: $278
Water pump: $190
The company sells the products by adding a mark-up of 120% on lawn mower and 150% on water pump. Due to increased competition, the company has decided not to increase the unit sales price in next year’s budget. The products are sold in Bunning warehouse and Yourlocal Hardware Store. Actual sale (in no. of units) for both the products in those outlets from January to March 2013 is as follows:
January February March Total
Bunning Warehouse Lawn mower 120 134 159 413
Water pump 70 81 78 229
Yourlocal
Hardware Store Lawn mower 105 123 111 339
Water pump 51 67 68 186
For January to March 2014, Gardening tools Pty Ltd is estimating that the overall sales for their products will increase in Bunning warehouse but may decrease in Yourlocal Hardware Store. The marketing and sales team is making the following forecast:
a. Sales for both the product will increase by 15% over same period last year in Bunning warehouse in February and March. But due to late summer, only in January it will increase by 6% over last year sales in the same outlet.
b. Yourlocal Hardware Store is facing significant competition from Bunning due to their aggressive pricing policy and losing customers. Therefore the sales team is estimating a 5% decrease in sales for lawn mower and 3% decrease in water pump sale in that outlet comparing to same period last year.
Based on the above facts the marketing team has requested you to calculate the estimated sales budget (in $) for January to March 2014 for both the product and area wise.
Answer Template:
Gardening tools Pty Ltd
Sales Budget
January to March 2014
January February March Total
Bunning warehouse Lawn mower Unit sales
Unit price
Total sale
Water pump Unit sales
Unit price
Total sale
Total
Yourlocal Hardware store Lawn mower Unit sales
Unit price
Total sale
Water pump Unit sales
Unit price
Total sale
Total
Grand total
Task 21: Operating Expenses Budget (1 Mark)
Parker and Company expects to spend $20,000 on general administration expenses in the month of
January 20XX. In February, these will be 90% of the January expenses; in March, 105% of January’s
expenses. The selling and distribution expenses total is expected to be 5%, and financial expenses
1%, of each month’s sales.
Prepare the operating expenses budget for the three months January to March
Sales amount are in $150,000, $175,000 and $180,000 in January, February and March respectively
Workings:
Parker and Company
Operating expenses budget – 20XX
January
$ February
$ March
$
General and administration expenses
Selling and distribution expenses
Financial expenses
Total
Read the following statements and write if you agree or disagree with the statements. Your analysis must be supported by argument. (2 Mark)
1. Cash flow management means managing the cash moving in and out of your business.
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1. Cash outflows usually occur after cash inflows.
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2. Two important benefits of cash flow management are to identify future cash flow problems and to reduce the amount of time between inflows and outflows.
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3. Three of the following are some of the most important components of cash flow. Which one is not?
A Stock
B Trade creditors
C Fixed assets
D Trade debtors
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4. Too much stock may negatively affect your sales ability and your relationship with customers.
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Week 6
Task 22: Part a: Accounts Receivable Collection Schedule and Cash Flow Statement
Part b: Create an EXCEL file and complete the calculations through using formula(3 Mark)
Stock & Co., a manufacturing company, need to produce a cash flow budget as part of an
overdraft application with their bank. The following are some of Stock’s budgeted figures:
Credit sales
$ Purchases
$ Wages
$
November 39 000 26 975 3 185
December 41 600 31 200 3 900
January 23 400 52 650 3 600
February 37 700 53 300 3 470
March 27 300 58 175 3 380
Budgeted cash at bank on 1 January is $5590.
Though credit terms of sale are payment by the end of the month following the month of supply, Stock & Co. can expect half of the sales to be paid on the due date, with the other half being paid during the following month. Creditors are paid during the month following the month of supply. Wages are paid in the month they are owed.
Utilising the following tables for format, prepare a cash budget for the quarter 1 January to 31 March 20XX.
Workings:
Accounts Receivable Collection Schedule
January February March
Receipts from sales in: $ $ $
November
December
January
February
TOTAL COLLECTIONS
Cash flow plan
January February March
$ $ $
Balance b/fwd.
Cash receipts (from credit sales)
Total Funds Available
Payments
Accounts Payable
Wages
Total Payments
Balance c/fwd.
What went wrong?
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What are the consequences of those wrongs?
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What managerial actions can be taken to rectify the errors?
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What organisational protocols should be followed for reporting if loss is inevitable?
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What support can be provided to the team members to ensure that proper management of finances is in action?
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Task 23: Asset Management - Managerial Decisions (1 Mark)
You are the owner of a small business. In the new financial year you are planning for business expansion. As part of that you are required to acquire new equipment and IT equipment to increase your production level. You have approached this issue to your Chief Financial Officer (CFO). CFO advised that there are three options available to acquire new equipment: Buying, leasing or hire purchase. All have some advantages along with disadvantages. Identify the advantage and disadvantages of them and recommend which one is preferable if you are to buy new IT equipment.
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Week 7:
Task 24: Cash flow analysis – Managerial Decision: Metropolitan Furniture (4 Mark)
Peter works in the accounts unit of the Metropolitan Furniture Manufacturing. He was asked to prepare a prop101028osed budget for the forthcoming quarter. He consults with the sales manager and finds that:
Estimated sales are as follows:
February : $265,000
March : $255,000
April : $290,000
May : $250,000
June : $280,000
In consultation with the production manager he estimates that the cost of goods sold is to be budgeted at 40% of the sales figure. The salaries are expected to be $75,000 per month. When sales exceed $270,000 in any one month, the sales team is entitled to an additional 4% commission on the excess sales over this figure. Other expenses are estimated to be $25,000 per month.
The owner of the organisation is concerned about the cash flow which was not thought of before. The owner is of the opinion that the collection of cash from sales is slow and this could possibly lead to cash flow problems to the organisation. As Peter has never forecasted cash flow before he sets about collecting information on this.
Peter estimates that 70% of the total sales are going to be cash sales where the bill is settled when the goods are purchased or delivered. 20% of the month’s sales) settle the accounts owed in the month following sales. Others (i.e. 10% of the month’s sales) settle in the month after.
Additional information for Cash Flow Statement:
The organisation gets a month’s credit on its purchases. That is, the accounts for the purchases (COGS) made in one month is settled in the following month.
All salaries are paid in the month as they are incurred.
The additional commission is paid in the month after the month in which it was earned.
Other expenses are paid in the month they were incurred.
The bank balance at the beginning of the first month is estimated to be $30 000.
Required:

1. Show the profit and loss calculations for April, May and June of operations.
2. Show the cash flow projection calculations for April, May and June.
3. Show amended figures if sales were to increase by 10% in each month and the cost of goods fell from 40% to 35% through a better long-term purchasing agreement with the supplier.
4. Does Peter need to suggest any contingency plan at this stage?
Workings:
Profit and Loss calculations
April May June
$ $ $
Sales
Less Cost of Goods Sold (COGS)
Gross Profit
Sales Salaries
Commission
Other expenses
Total expenses
Net Profit
Cash flow projections
April May June
$ $ $
Opening Cash
Plus cash in:
This month
From last month
From two months ago
Total Cash available
less cash out:
salaries
Commission
Other expenses
COGS
Total cash out
Closing cash balance
Amended Profit and Loss calculations
April May June
$ $ $
Sales
Less Cost of Goods Sold
Gross Profit
Sales Salaries
Commission
Other expenses
Total expenses
Net Profit
Amended Cash flow projections
April May June
$ $ $
Opening Cash
Plus cash in:
This month
From last month
From two months ago
Total Cash available
less cash out:
Salaries
Commission
Other expenses
COGS
Total cash out
Closing cash balance
Task 25: Constructing a Cash Flow Statement (1 Mark)
Constructing a Cash flow statement:
Calculate the total cash inflows and cash outflows and the net cash position at the end of December from the following information:
Use the space provided and shows all line items.
XYZ Pty Ltd.
December 2014
Particulars Amount ($)
Cash receipts from customers 235,000
Cash paid to suppliers and employees 121,570
Interest paid 34,120
Income tax paid 29,910
Purchase of Subsidiary X, net of cash acquired 550000
Purchase of property, plant and equipment 450,100
Proceeds from sale of equipment 20,000
Interest received 12,550
Dividends received 35,654
Proceeds from issue of share capital 250,000
Proceeds from long-term borrowings 250,000
Payment of finance lease liabilities 90,000
Dividends paid 135,700
Cash and cash equivalents at beginning of period 430,750
Answer Template:
Particulars $ $

Task 26: General knowledge: Manage your business cash flow (3 Mark)
Read the following statements and write if you agree or disagree with the statements. Your analysis must be supported by argument.
1. The purpose of cash flow planning is to ensure that the cash balance is enough to meet current and future financial requirements.
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2. When preparing a cash flow budget you will need to:
A estimate cash outflows for the period.
B estimate cash inflows for the period.
C estimate the future cash position of the business.
D do all of the above.
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3. The cash flow equation is as follows.
Beginning cash balance + estimated sales - estimated purchases = ending cash balance
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4. The sales forecast is not important in the preparation of the cash flow budget.
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5. In a retail business the largest cash outflow is generally the cost of goods to be sold?
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6. After the financial plan is developed and implemented, it is important to communicate and distribute it to the relevant people to satisfy the legal requirements. List some examples of relevant people. Explain why it is critical.
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7. “It is critical to obtain accountant/financial planner’s advice to profitably operate and extend the business in accordance with the business plan” - Explain
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Task 27: Petty Cash (2 Mark)
Required:
Prepare the Pretty Cash Book for the month of January by:
1. Recording the establishment of the petty cash float in the Petty Cash Book
2. Recording the payment vouchers in the Petty Cash Book
3. Balancing the Petty Cash Book on the dates indicated
4. Recording the reimbursement cheques in the Petty Cash Book