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ACC00724 Accounting for Managers Assignment Question and Answers

Assignment Analysis on Accounting for Managers provides Online Financial Accounting Assignment Help by professional experts on ACC00724 Accounting for Managers Assignment. Being the leading online assignment writing service in Australia, UK and the US, our team assures 100% academic success of students. No longer will students have to spend endless hours on the internet searching for write my assignment for me.


Question 1

a. Cash Budget

Cash Budget

Cash Budget July Aug Sep Oct Nov Dec Total
Opening Cash Balance 10000 4500 -4800 -32300 -79300 40900 -61000
Cash Inflows:
Total Cash Collections 167500 215500 297500 395000 443000 352000 1870500
Total Cash Available 177500 220000 292700 362700 363700 392900 1809500
Cash Outflows:
Total Cash Payments 133000 184800 252000 322000 282800 179200 1353800
Selling, General & Administrative Expenses 40000 40000 40000 40000 40000 40000 240000
Taxation Expense 33000 33000 66000
Capital Expenditure 80000 80000
Total Cash Outflow 173000 224800 325000 442000 322800 252200 1739800
Closing Cash Balance 4500 -4800 -32300 -79300 40900 140700 69700

b. Sources of Fund

Every business entity including companies requires funds to perform its business operations, to expand their businesses into new locations or markets, to overcome the competition or to invest in research & development (RND). Like any other company, both the selected companies also have limited sources to raise to raise capital funding or external funding. The various sources are:-

  • Retained Earnings
  • Debt Capital
  • Equity Capital

Debt Capital

Like any other entity, companies also can borrow money in the form of private bank loans or issue of debentures, corporate bonds or other debt securities to public. Using debt issues a huge number of investors can become the lenders to the company. The most important drawback of debt capital is the fixed payments (interest) to the lenders.

External Source: Debt Financing: Merits

  1. With debt financing the ownership rights remains intact and a limited number of people has the controlling powers:
  2. The Taxation Agencies offers various deductions upon the financing cost.
  3. The costs of financing (or interest rates) are comparatively lower than the cost of equity.

External Source: Debt: Shortcomings

  1. The major shortcoming of debt financing is that the company has to make fixed periodical repayments to the lender irrespective of profits or losses in the company.
  2. The lender in order to guarantee the repayment of loan from the company requires some collateral security.
  3. The ability to repay the loans highly impacts the credit rating of the company.
  4. The company is required to have large pool of liquid funds like cash or equivalents.

Question 2

a. Variance Analysis

Particulars Budgeted Actual Variance $ Variance %
Sale 800 760 -40 -5%
Price 40 40 0 0%
Revenue 32000 30400 -1600 -5%
Supplies 1600 2000 400 25%
Labor 16000 16000 0 0%
Variable Utilities 1600 1520 -80 -5%
Fixed OH 9000 9000 0 0%
Profit / (Loss) 3800 1880 -1920 -51%

b. Interpretation of Variance Analysis

The actual to budget variance analysis is very important during the financial planning of a business. It is a process by which the budget of a company gets compared to the actual outcomes and later interpretation of the reasons for the variance is conducted.

When budgeted figures are compared to the actual figures numbers and the differences are called as variance. It is calculated for revenue, labor, materials, and variable expenses. However, management pays attention to variances that are significant. Generally, analysis of these variances is conducted to identify any problem in order to fix them or to improve the overall performance of the company. This is an unfavorable situation

As per the above variance analysis of ABC Pty Ltd, the actual sales revenue is less by 5% than expected (budget), the main reason is that the company was not able to sale its services as per expectations (800 WCD) and could sale only 760 WCDs

Despite of lower sales volume, the cost of supplies increased by $400, this is also an unfavorable situation

The variable utilities witness a little decrement in the actual figures ($ 1520) as compared to the budgeted figures ($ 1600). The main reason is that the actual sales remain lower than the budgeted sales and variable expenses are directly depended on the sales volume. This cannot consider being a favorable situation.

Overall the overall profit of the company gets reduced considerably.


Coleman, S., Cotei, C. and Farhat, J. 2016. The debt-equity financing decisions of US startup firms. Journal of Economics and Finance, 40(1), pp.105-126.

Schwienbacher, A., Baker, T. and Welter, F. 2015. Financing the business. The Routledge companion to entrepreneurship, pp.193-206.

Yazdanfar, D. and Öhman, P. 2015. Debt financing and firm performance: an empirical study based on Swedish data. The Journal of Risk Finance, 16(1), pp.102-118.

Chiu, C.H., Choi, T.M., Dai, X., Shen, B. and Zheng, J.H., 2018. Optimal advertising budget allocation in luxury fashion markets with social influences: a mean‐variance analysis. Production and Operations Management, 27(8), pp.1611-1629.

Saputra, M.D. and Putrayasa, M.A., 2018, May. Analysis of sales budget and actual sales at CV Sumberjaya. In Proceedings (Vol. 1, No. 1, pp. 141-146).

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