Budgetary planning featuring Babycakes full video [Video file]. Retrieved from https://www.youtube.com/watch?v=frh3I2rVDzsBabycakes, a specialty bakery, is the company that will be considered for all parts of your budget planning and control report. For this assignment, you will develop a 3 page paper in which you address the following.
Briefly discuss the ways a realistic budget will benefit the owner of Babycakes versus no budget at all. Be sure to use Babycakes as the company and any specific product details in your explanation.
Prepare a sales budget for the LA Babycakes store for the fourth quarter of 2016. Present the number of units, sales price, and total sales for each month; include October, November, and December, and the total for the quarter. Use one half of the Valentine’s Day sales as the basis for a usual day in the new quarter. Use 30 days for each month. Calculate the total sales for each month for October, November, and December.
Create three new products, one for each of the three holiday seasons in the fourth quarter.
Estimate the sales units, sales price, and total sales for each month. Describe the assumptions used to make these estimates. Include an overview of the budget in the report, presenting the actual budget as an appendix with all the data and calculations.Add these amounts to your sales budget.
The owner of Babycakes is interested in preparing a flexible budget rather than the static budget she currently uses. She does not understand why, when sales increase, her static budget often shows an unfavorable variance. Explain how a flexible budget will overcome this problem. Use the details of your newly prepared budget for the fourth quarter of 2016 to address her concern.
Imagine that Babycakes is facing a financial challenge that is causing the actual amount of money that it spends to become significantly more than its budgeted amount. Include a discussion of your own unique cause of the overspending. Explain the corrective actions needed to address these challenges.
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