What strategies could you implement to monitor resource usage throughout Month 3 and how would you involve the staff in the budget plan, review and results process and to keep the staff informed of any changes to the allocation of resources?

  1. Given the reviewed revenue forecast for Month 3, plan the reallocation of resources for Month 3 if you still wish to achieve the same profit as in Month 1. How would you decide which areas to reallocate?
Months vs. Profit/Loss Month 1 Month1 Month 2 Month 3
Budget Actual Budget Budget
Revenue $50,000 $45,000 $50,000 $37,500
Purchases 22,000 20,000 22,000 13500
Advertising 500 2,000 500 200
Cleaning costs 500 500 500 300
Office supplies 2,000 1,750 2,000 1200
Repairs & Maintenance 1,000 3,000 1,000 750
Telephone and postage 1,500 1,000 1,500 1050
Wages & on-costs 10,000 10,000 10,000 8000
Profit (or Loss) $12,500 $6,750 $12,500 $12,500
Month 2 $37,500
Total cost Month 3 $25,000
25000

 

 

How would you decide which areas to reallocate?

 

 

 

 

  1. What strategies could you implement to monitor resource usage throughout Month 3 and how would you involve the staff in the budget plan, review and results process and to keep the staff informed of any changes to the allocation of resources? Included in your answer should be the importance of the awareness of budget control.