Budgeting Case Assignment



Budgeting Case Assignment

PART - 1

Question 1

The Charter School are using Flexible or Variable Budget that is being developed for different levels of activity and can be adapted to changing environmental circumstances. They are very popular in the modern budgetary field. Flexible budget is dynamic, adaptive, but complicated and expensive. Budgets are being developed for different levels of activity and can be adapted to the circumstances arising at any time. These show the revenues, costs and expenses adjusted to the size of manufacturing or commercial operations. The Carter School budget has wide application in the field budget costs, manufacturing overhead, administrative and sales. The flexible budget of Charter School is prepared for different levels of operation, providing information designed for different volumes of the critical variables, especially those that constitute a restriction or condition factor. Its characteristic is that it avoids the stiffness of master budget - static - which is a fixed level of work, making it a dynamic tool with various levels of operation to determine the impact on the predicted results of each activity range, reflecting the different reactions compared to those costs. This means that it is constructed for a certain interval between a minimum volume and a higher one, given by the maximum level of activity of Charter School.

Question 2

Number of Students

120

100

66

Revenue

General Revenue (@ $ 3,546 per student)

425,520

354,600

234,036

Compensatory revenue (@ $ 1,775 per student)

213,000

177,500

117,150

Transportation Revenue (@ $ 170 per student)

20,400

17,000

11,220

TRA Reduction (@ $ (-) 42.44 per student)

(5,093)

(4,244)

(2,801)

Food Reimbursement (@ $ 246.50 per student)

29,580

24,650

16,269

Federal Title I Funds (@ $ 368 per student)

44,160

36,800

24,288

Total Revenue

727,567

606,306

400,162

Revenue Per Student

6063

6063

6063

Question 3

Number of Students

120

100

66

Revenue

General Revenue (@ $ 3,546 per student)

425,520

354,600

234,036

Compensatory revenue (@ $ 1,775 per student)

213,000

177,500

117,150

Transportation Revenue (@ $ 170 per student)

20,400

17,000

11,220

TRA Reduction (@ $ (-) 42.44 per student)

(5,093)

(4,244)

(2,801)

Food Reimbursement (@ $ 246.50 per student)

29,580

24,650

16,269

Federal Title I Funds (@ $ 368 per student)

44,160

36,800

24,288

Total Revenue

727,567

606,306

400,162

Revenue Per Student

6063

6063

6063

Total Expenses

542,157 528,267 504,654

Total Expenses Per Student

4,518 5,283 7,646

Revenue Less Expenses

185,410

78,039

(104,492)

Question 4

Not all expenses seems necessary for Charter School, because its causing the revenues towards declining trend as more expenses which are not so important are incurring. For that reason the management of School needs to cut down there extra expenses in order to have positive numbers in terms of revenue in the case if there are only 66 students.

Question 5

Financial analysis, which allows managers to make informed business management decisions and monitor their implementation, has a significant arsenal of methods and techniques. The preparation of Charter School budget has two main features are most important. The first feature of the budget is the main function of overall budget because it relates to the financial control of the organization (McWatters, et.al, 2008). Secondly, the budgetary control is the important feature which is the process of discovering what is being done by comparing the results with budgeted data corresponding to ...