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unit 6 assessment

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Unit six: Principles of budgets in a business environment Assessment You should use this file to complete your Assessment. The first thing you need to do is save a copy of this document, either onto your computer or a USB drive Then work through your Assessment, remembering to save your work regularly When you’ve finished, print out a copy to keep for reference Then, go to www.vision2learn.com and send your completed Assessment to your tutor via your My Study area – make sure it is clearly marked with your name, the course title and the Unit and Assessment number. Please note that this Assessment document has 7 pages and is made up of 3 Sections. Name: Section 1: The purpose of budgets This section will help you to evidence …show more content…

For example interest rates, the cost of raw materials including fuel, the number of sales or orders that we make and in turn all of these rely on other factors. The best therefore that can be done when developing a budget is to look at all the factors that are likely to affect the budget and decide how to take account of each one. If there is a previous budget (last year or last month) then it is sensible to look at how this has been achieved or not as the case may be, and what factors affected the outcome. If we are looking at monthly budgets it might be a better comparison to look at the same month twelve months ago as well as the previous months. The more factors we take into consideration when estimating a budget, the more accurate our budget will be. If the estimations in a budgeting process are poor, the organisation and the customers may suffer. 3. Explain two methods that can be used in order to identify realistic estimations when developing a budget. [2.2] Method 1: Incremental budgeting is a type of budgeting that adds a certain amount of capital to a previous period's budget in order to allow for slight increases. The adjustment will be determined by any significant influencing factors identified by the organisation, such as changes in staffing levels, replacing equipment and the increased cost of gas and electricity prices. In some organisations, the adjustment may be as simple as adding the

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