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Summary Budget Statement copy.docx BUSI 2153 Developing a Budget Statement Assignment Bachelor of Business Administration, Yorkville University BUSI 2153: Entrepreneurship Developing a Budget Statement Assignment Introduction Preparing a budget is a neces

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Budget Statement BUSI 2153 Developing a Budget Statement Assignment Bachelor of Business Administration, Yorkville University BUSI 2153: Entrepreneurship Developing a Budget Statement Assignment Introduction Preparing a budget is a necessity for every business. Its not enough just to sell ...

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BUSI 2153
Developing a Budget Statement Assignment
Bachelor of Business Administration, Yorkville University

BUSI 2153: Entrepreneurship

Developing a Budget Statement Assignment

Introduction

Preparing a budget is a necessity for every business. It’s not enough just to sell the

product without a decided budget in mind. A budget is necessary to earn profits along with

keeping a control over production costs. In this paper, we have included the budget statement of

the balance sheet, the cash flow & profit and loss considering the new business idea of

introducing snack bars and cookies and manufacturing them. While some information is

supported by secondary research in preparing the budget, some is acquired through sources

directly or indirectly associated with Wize.

What is a budget statement and why is it needed?

A budget statement is the statement which includes the estimated profits, revenues and

expenses of the company in the upcoming years. It helps the companies to make decision better

and allocate the resources effectively and efficiently (Hilton, 2007). The main objective is to

make the company capable of fulfilling goals and financial targets in a better way. According to

Picincu (2020), if we are planning to buy some new products or equipment for the company or

trying to hire new people then proper budgeting is very important. If we talk about the

managers, then this will help them to justify the resource that is needed for any particular project

and to attract the investors too. Moreover, it also encourage the employees to work together

towards a single goal and helps in attaining it.

, Thus, by developing a budget statement, there will be a better understanding of how

much finance is needed by the company in the first year and also an overall projection of

expenses, revenue, and other variables.

Budgeted Income Statement:

Cost of goods sold:

Let’s say the target sale for snack bar and cookies is 5000 each per month, which amounts

to 60000 units each annually. Coffee leaf as an ingredient would amount to 5 grams in each unit.

So, the amount of coffee leaves needed would be (60000 + 60000) * 5 grams = 600000 grams or

600kg annually. The cost of coffee leaf is $12 per kg, so, coffee leaf cost for producing snack

bars and cookies will be $7200 per year. If we include additional ingredients like sugar, butter,

flour, etc., the total cost per year would approximately be $20000.

Revenue:

The price for the snack bar is let’s say set at $3.00 and that of cookies at $10.00. So, with

60000 units each sales projection, the revenue would be 60000*3 + 60000*10 = 780000.

Rent:

Currently, the warehouse of the company is located in South Surrey, where the average

monthly rent for 20000 sq. ft. facility is $18000. So, annual expenditure on rent will be $216000.

Wages & Salary:

For producing 5000 units per month, let’s say there will be 10 people working on

production line. The average annual salary of production worker is $38,284 with an hourly wage

of $18 (Economic Research Institute, n.d.). For 10 people, the wage expenditure will be

$382840. Salary for 2 managers and 3 supervisors is assumed to be $96,000 and $126,000 per

year, respectively.

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