Budget Planning And Control Use The Video And Its Informatio

Budget Planning and Control Use the Video And Its Information Providedh

Budget Planning and Control Use the video and its information provided here and in Week 8 Instructor Insights about babycakes, a specialty bakery. Babycakes is used as the company for all parts of the budget planning and control report. Write a three to four (3-4) page paper in which you: 1. Briefly discuss the ways a good budget will benefit the owner of babycakes versus no budget. Use the specific company and product details in your explanation. 2. Prepare a Sales Budget for the LA store for 4th quarter of 2016 for babycakes. Present the number of units, sales price, and total sales for each month; October, November, and December, and a total for the quarter. Use one half of the Valentine's Day (one day) of sales as the basis for a normal day of one product. This information is in the babycakes video provided in Week 8. 3. Create three (3) new products, one for each of the three (3) holiday seasons in the fourth quarter. Estimate the sales units, sales price, and total sales for each month. Describe the assumptions used to make these estimates. Include an overview of the budget in the report, presenting the actual budget as an appendix with all data and calculations. 4. The owner of babycakes is interested in preparing a flexible budget rather than the static budget she currently uses. She does not understand why when sales increase her static budget often shows an unfavorable variance. Explain how a flexible budget will overcome this problem. Use the details of your newly prepared budget for the 4th quarter of 2016 to address her concern. 5. Imagine that babycakes is facing a financial challenge that is causing the actual amounts of money that it spends to become significantly more than its budgeted amounts. Include a discussion of your own unique cause of the overspending. Explain the corrective actions needed to correct the challenge. 6. Integrate relevant information from at least three (3) quality academic resources in this assignment. Note: Wikipedia and other Websites do not quality as academic resources. Do not use the textbook. Your assignment must follow these formatting requirements: · Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. · Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length. · An abstract is not required.

Paper For Above instruction

Budget planning and control are critical tools for managing financial health and operational efficiency in a business like Babycakes, a specialized bakery focusing on unique, high-quality baked goods tailored for seasonal and specialty markets. A well-constructed budget benefits the owner by providing clear financial goals, facilitating informed decision-making, enabling better cash flow management, and highlighting areas for cost control and revenue enhancement. Conversely, the absence of a budget leaves the business vulnerable to financial mismanagement, unclear priorities, and reactive rather than proactive management strategies, which can threaten long-term sustainability.

For Babycakes' LA store during the fourth quarter of 2016, a detailed sales budget can be developed by analyzing past sales data and applying realistic assumptions. Based on the Week 8 video, assume that a typical day’s sales for a single product, such as a cupcake, is half of Valentine's Day sales, which we will estimate as 50 units sold per day at a price of $3 each, generating $150 daily. Operating the store approximately 60 days in the quarter (October, November, December), the monthly calculations are as follows:

- October: Assuming 20 sales days, units: 50 units/day × 20 days = 1,000 units; sales revenue: $3 × 1,000 = $3,000.

- November: 20 sales days, units: 1,000, total sales: $3,000.

- December: 20 sales days, units: 1,000, total sales: $3,000.

The quarterly total sales amount to $9,000. These estimates serve as a baseline, considering increased consumer activity around the holidays.

To capture seasonal customer preferences and the holiday spirit, three new products are proposed for the holiday seasons in Q4:

• Halloween Season: A festive pumpkin spice cupcake, estimated at 300 units/month at $4 each, owing to seasonal demand and premium pricing assumptions.
• Thanksgiving Season: A pecan pie cupcake, estimated at 250 units/month at $4.50, considering the regional popularity of pecans and holiday baking trends.
• Christmas Season: A peppermint mocha cupcake, estimated at 350 units/month at $4.25, reflecting holiday flavors and increased gift-giving occasions.

Assumptions for these estimates include consistent customer demand during respective seasons, stable pricing based on ingredient costs and competitor pricing, and marketing efforts that highlight seasonal products. These estimates influence the overall budget, guiding inventory decisions and sales forecasts.

The actual budget is documented as an appendix with detailed data, calculations, and justifications. This transparency ensures clarity in financial planning, aids in variance analysis, and supports strategic adjustments.

Regarding budget flexibility, employing a flexible budget addresses the limitations of static budgets, especially during sales fluctuations. Static budgets are based on fixed sales volumes, which do not account for actual performance variability, leading to unfavorable variances when sales increase. A flexible budget adjusts the budgeted costs and revenues proportionally to actual sales levels, providing more accurate comparisons and highlighting operational efficiencies or inefficiencies.

Applying this to Babycakes’ Q4 2016 budget, if actual sales exceed projections, a flexible budget would scale expenses accordingly, showing variances that truly reflect operational performance rather than initial assumptions. This approach enables the owner to better understand the efficiency of operations during high-sales periods and make informed decisions on resource allocation and cost control.

Finally, one plausible cause of overspending at Babycakes could stem from increased ingredient procurement driven by overestimations of demand or seasonal promotions. Unexpected spikes in ingredient prices or inefficient inventory management might also contribute. To address this, corrective measures include implementing better demand forecasting, optimizing inventory management, and negotiating better supplier contracts to reduce costs. Regular variance analysis can help identify deviations early, enabling proactive adjustments before overspending becomes unmanageable.

References

• Drury, C. (2013). Management and Cost Accounting. Cengage Learning.
• Horngren, C. T., Sundem, G. L., Stratton, W. O., & Burgstahler, D. (2014). Introduction to Management Accounting. Pearson.
• Kaplan, R. S., & Atkinson, A. A. (2015). Advanced Management Accounting. Pearson.
• Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2018). Managerial Accounting. McGraw-Hill Education.
• Anthony, R. N., & Govindarajan, V. (2014). Management Control Systems. McGraw-Hill Education.