CHAPTER 9 Budgeting 417Wages breakdown for 2017
Annual salaries for the employees are as follows:
Ten drivers @ $100 000
Office manager
Administration staff × 2
Sales staff × 3$1 000 000
150 000
100 000
150 000
Total salaries $1 400 000Additional information
The following changes are expected in 2018.- A new enterprise bargaining agreement is expected to be approved which will increase salaries
by 4 per cent. - Due to uncertainty regarding the cost of fuel an expected increase of 1 per cent is to be allowed
in the budget. - The fuel is included in the vehicle-related expenses and is 50 per cent of the expense.
- Utilities are expected to increase by 2 per cent.
- To encourage sales staff to boost sales to the expected levels, the sales commission will increase
from 5 per cent to 5.5 per cent of sales. - Marketing-related expenses are expected to increase 25 per cent.
- General administration expenses are expected to increase by 1 per cent.
- Loan interest and depreciation for 2018 will be the same as for 2017.
Required
Prepare a sales budget, operating expenses budget and a budgeted statement of profit or loss for
Online Logistic Solutions for 2018 taking in consideration revenue and cost changes identified by
the business.
Decision-making activities
9.58 Go to the website for JB Hi-Fi Ltd and examine its latest annual report. Write a report to the
finance manager explaining how you would prepare the sales budget.
9.59 Yummy Burgers R Us operates a store in Melbourne City, and the following is its average monthly
statement of profit or loss:
$ $
Revenue
Food
Beverages50 000
15 000 65 000
Cost of sales
Food (50% of revenue)
Beverages (20% of revenue)25 000
3 000 28 000
Gross profit 37 000
Operating expenses
Wages
Operating supplies
Administration
Advertising
Repairs and maintenance of equipment
Utilities
Depreciation
Interest15 000
5 000
3 000
2 500
1 500
2 500
1 000
1 000 31 500
Profit before tax $5 500