Budgeting for Reach The World Mobile Telephone Company (RTWMTC)

Abstract

The paper has provided annual budget for RTWMTC based on certain underlying assumptions. In the light of annual budgeting, the paper has identified the employee strength, additional cost and budget deficit of RTWMTC. Moreover, the paper has highlighted the significance of budgeting for RTWMTC under the light of key reasons of budgeting. In addition to this, paper has provided an overview of key members who should be involved in the budgeting process.

Key Words: Budgeting, RTWMTC, employee strength, additional cost, significance of budgeting, key reasons

Budgeting for Reach The World Mobile Telephone Company (RTWMTC)

Unit 1 - Fundamentals of Budgeting (Individual Project)

RTWMTC is a nonprofit organization that reported annual income of $ 800, 000 for the budgeted year. Being executive director of RTWMTC, certain assumptions have been taken to prepare the annual budget for the FY ended December 31.

Annual Budget for RTWMTC

The annual budget for RTWMTC is illustrated by table 1.

Reach The World Mobile Telephone Company

Dec. 31

Revenue

800, 000

Expenditure

Salaries

232, 000

Utilities

96, 000

Supplies

180, 000

Advertising

300, 000

Other Expenses

168, 000

Total Expenditure

976, 000

Budget Surplus/Deficit

(176, 000)

Table 1: Annual Budget

Current Strength of Employees

At present, the company has total employee strength of 10, as illustrated by table 2. The company has employed three managers for the post of sales manager, IT manager and finance manager. Similarly, the company has employed two administrative personnel. In addition to this, there are 8 employees hired as service personnel for RTWMTC.

Employees Strength

13

Managers

 

IT manager

1

Sales Manager

1

Finance Manager

1

General & Administration Personnel

2

Service Personnel

8

Table 2: Employee Strength

Payroll of Employees

Generic breakdown of the hired employee strength indicates total salaries and wages of worth $ 232, 000. The company is offering compensation and benefits to managerial employees at the rate of 10% of total salary.

Reach The World Mobile Telephone Company

 

 

Dec. 31

Net Revenues

800, 000

 

 

Sales & Marketing

 

Sales Manager

37, 000

Finance Manager

40, 000

IT Manager

38, 000

Total Salary

115, 000

Benefits

 

Percent (%)

10%

Total benefit costs

11, 500 Total S & M Compensation

126, 500 % of Revenue

3.33

General & Administration

 

Accounting

20, 000

Admin personnel

22, 000

Total Salary

42, 000

Benefits

 

Percent (%)

0.05

Total benefit costs

0.15

Total G & A Compensation

42, 000 % of Revenue

1.11

Cost of Revenue

 

Service Personnel

 

Number of employees

5

Salary per employee

15, 000

Total salaries

75, 000

Benefits

 

Percent (%)

3%

Total benefit costs

2, 250

Total Salary Costs

77, 250

Total COR's Compensation

77, 250 % of Revenue

2.03

 

 

Total Salary & Wages

232, 000

Total Benefits

11, 500

Total Compensation

245, 750 % of Revenue

 

6.47

Table 3: Salary Breakdown of Employee Payroll

Moreover, the company has hired two administrative employees at the total salary expense of $ 42, 000. The company is offering compensation and other employment benefits to these employees at the rate of 5%. In addition to this, company has hired 5 service personnel at $ 15, 000 salary of each employee. These employees are offered employment benefits at the rate of 3% of total salary cost. Hence, total employee strength of RTWMTC during the given year was ...