Budget Planning and control

Document Type:Business Plan

Subject Area:Marketing

Document 1

It will be more favorable if Babycakes bakery has a realistic budget as compared to not having budget at all. The bakery will have a realistic outline that it requires through inputs and its costs, since it lets the management to strategize beforehand and know the total amount of money they require to make cakes. This is important since the resources intended to be redirected for other uses will be used by the business for a specific purpose. Babycake bakery will have to make cakes by purchasing raw materials that it needs such as sugars, flour, fat, salt, yeasts, flavors and enhancers. But, money is required for purchasing these resources. The sales budget in the bakery integrates the prospects of what the business plans to sell in the form of units and prices.

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To achieve this, a focus form will be used. The business operates in the production and sale of special cakes like cakes for weddings, birthday events, Christmas, valentine, and other events. Babycakes makes cakes and sales them on demand. The business is only involved with production and sale of cakes and no other products. Include an overview of the budget in the report, presenting the actual budget as an appendix with all data and calculations. Add these amounts to your sales budget. In this quarter, Babycake bakery will take advantage of the holiday seasons by introducing new products and these are the Xmas cakes for the Christmas occasion, Thanksgiving cakes intended for Thanksgiving occasions and New Year cakes for New Year occasion.

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Appendix II gives analysis of the product and their prices in this event. The owner of Babycakes is interested in preparing a flexible budget rather than the static budget she currently uses. The price of a product changes in a flexible budget. For instance, the cost of a product increase or decreases, the total amount changes consequently. Flexible budget changes to reflect the actual volume contrary to the estimated or budgeted volume (Solomon, 2008). When the budget indicates a negative change, it will result to the decrease in the price of cakes against the original estimate or decline in the volume of units sold. This will cause the revenue gained from sales to drop. Excess expenditure on employees could be another area.

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For a small bakery like Babycare, many workers will make the capital to experience excessive strains. Babycare should should employ qualified staffs then keep the cost low to maintain efficiency and productivity. Appendix I Sales projection for Babycakes Bakery for the 4th Quarter 2016 Small Medium Large Special orders Wedding Cakes 430@$8 3440 450@$16 7200 720@22 15,840 10@85 850 Birthday Cakes 800@11 8800 200@18 3600 600@21 12600 50@35 1050 Graduation cakes 450@14 6300 700@15 10500 450@23 10350 23@40 820 Anniversary cakes 220@18 3960 1200@26 31200 200@30 6000 5@60 300 Others n/a n/a n/a 3020 Total 22500 52500 44790 3020 Aggregate Total $122,810 NB: Half of Valentine Day Sales are used as the base figure for this projection. There were 1600 units of Valentine Day’s sales Appendix II Table showing a sales budget estimate for new products during the holiday season Product Unit sales Unit price Amount Xmas Cakes 500 16 8000 Thanksgiving Cakes 800 4 3200 New Year Cakes 300 8 2400 Total $13,600 Work Cited Solomon, J.

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