Accounts Homework Help

Recently we were contacted for help for an Accounts assignment. The three page assignment required one to

  • Review the financial statements for International Business Machines Corporation (IBM).
  • Discuss the importance of each type of budget (master, sales, production, direct materials, manufacturing overhead, sales and administrative).
  • Give 1-2 examples describing how each budget can assist the company in improving profitability for future periods.

    Here we discuss budgeting process and the different types of budgets companies use. In case you are stuck with a similar problem, do not hesitate to contact us at [email protected]

    It is important to first understand purpose of the entire budgeting exercise which is to ensure effective allocation of resources. As a part of budgeting exercise businesses estimate their fund inflow and outflow for a particular period in future and then decide their actions. This helps in running a business effectively and efficiently. The entire exercise involves not only company’s finance department but production, procurement, sales department along with others. There are different types of budgets which are used for management of businesses. Here they are briefly discussed in the order in which they are made.

    Sales Budget

    The entire budgeting exercise begins by preparing a sales budget. This is used to forecast revenue for a given period.

    Production Budget

    Sales budget sets sales goals, which can be met only with the help of production department. The department has to estimate number of units which must be produced to support the sales team. A production budget helps them in this regard.

    Direct Materials Budget

    This budget is prepared after production budget. It helps in figuring out the quantity of material which would be required to fulfil the requirements of production budget.
    Manufacturing Overhead Budget
    This budget takes in to account manufacturing costs other than direct materials and labor cost. Apart from efficient allocation of financial resources this budget helps in calculating per unit over head allocation which helps in finding out per unit cost of finished good.

    Selling and Administrative Budget

    Based on number of units to be sold company can estimate selling and administrative expenses to be incurred over a specific period in future. This budget helps in knowing in advance the amount which company would need to incur to meet its sales goals.

    Master Budget

    Company’s master budget is made using the sub budgets described above. This budget helps define company’s financial and production goals.

    For help in Accounts Assignment or Accounts homework please contact us at [email protected]