BTEC First Diploma in Business
Unit 3: Investigating Financial Control
‘Lets talk money’
Name: ……………………………………………………………..
Assignment Manager:
Hand out date:
This assignment will be in two parts with a deadline given for each.
The overall deadline for the whole assignment to be complete and handed in is:
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The following guidelines should be used when completing your assignment:
- You must refer to the criteria banner and the content of the unit throughout the assignment.
- You should make sure you do detailed research and have a good understanding of the financial control.
- Before handing in you must:
- Check that you have completed all tasks
- Label work appropriately
- Present tasks in the correct order
- That your name appears clearly in the header or footer of each page
For further details refer to the ‘Student Guidelines’ that were issued to you at the start of your course.
Scenario: You have just started working in the finance department of Richer Sounds. You will be training alongside one of the senior accountants. You have had a number of financial concepts explained and have decided to write them down with explanations for reference during your training. |
Task 1: (P1)
Describe, using examples, the importance of costs, revenue and profit for Richer Sounds.
You must consider the following;
Business Costs: costs incurred at start up; operating costs (fixed, indirect, variable, direct costs, total costs)
Revenue: sources of revenue e.g. sales, leasing, interest, calculating total revenue (unit sales price x number of units sold)
Calculating gross and net profit: revenue (income) minus costs (expenditure), cost of sales, expenses (operating costs), maximising profits (increasing revenue and/or decreasing costs)
You have been working for Richer Sounds for a couple of months now and your manager has asked you to calculate the break even point for a possible new store in Maidstone.
Task 2: (P2)
Calculate break even using given data below to show the level at which income equals expenditure. Your manager has asked you to show this both as a calculation and as a graph.
Fixed costs per month:
Rent £700
Wages £500
Heating & Lighting £200
Insurance £160
Loan interest £40
Drawings (personal salary) £400
Variable costs per month:
HD Ready Television £500ea
Total Revenue per month:
HD Ready Television £800ea
To achieve M1 use this data to demonstrate the impact of changing cost and revenue data on the break even point.
You must consider the following:
Break even: Balancing costs or expenditure with revenues or income; areas of profit and loss; margin of safety
Richer Sounds are in the final stages of deciding to open a new store in Maidstone and you have been asked to prepare a twelve month cash flow forecast to see whether the new business is likely to survive.
Task 3: (P3)
Prepare an annual cash flow forecast for Richer Sounds using the monthly data given in task two.
To achieve M2 analyse the implications of regular and irregular cash inflows and outflows for Richer Sounds.
To achieve D1 evaluate how cash flows and financial recording systems can contribute to managing business finances.
You should consider the following:
Cash inflow: Capital; sales; loans; regular and irregular inflows; timing of inflows
Cash outflows: Purchases; loan repayments; wages; regular and irregular outflows; timing of outflows
Cash balances: Opening balance; closing balance; income per period; expenditure per period
Task 4: (P4)
Describe simple ways of recording financial transactions and preventing fraud at Richer Sounds.
You should consider:
Transactions: Document sequence of sales and purchasing from order to receipt of goods e.g. order form, delivery note, invoices, credit notes, cash receipts and payments
Recording: Manual or electronic recording; day books; accounts; petty cash; cash registers; direct electronic input e.g. Electronic Point of Sale (EPOS)
Fraud: Prevention measures; management information and control
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