Budget proposal Term Paper Example | Topics and Well Written Essays - 1000 words

Budget proffer - Term Paper Example voice 1. Rationale In line with the corporate goal of XYZ resort and trunk Massage Parlor to keep track of its profit this quarter of the year, this cipher proposition go forth specifically determine the needed overhead costs. This is very big in order that the management depart be able to keep track of the expenses involved and the probable projection of the gross that needed to be targeted. In line with this, the management requires the accounting department to submit a simple budget proposal showing the projected overhead costs of the fraternity at different level of activities. Section 2. background signal XYZ Spa and Massage Parlor has recently formulated strategic moves in order to project and growing its revenue. On January, the management specifically appointed the marketing department to formulate marketing activities that leave behind alleviate enhance the current revenue of company. Optimistic about the impact of this strate gy, there is a need to intent ahead of time on the needed budget for the operation as the marketing strategy will help enhance revenue just in case if it is effective for the customers. From the past trend of the company for its three branches, marketing strategy has proven to be effective. Last year, it contributed about 20% of the revenue for the entirely year. The management is quiet satisfied about this discriminating that there are opposite competitors and with this, the company has significantly viewed its competitive edge through marketing strategy. This proposal is in line with the great concern of the chief operating officer to generate budget plan on the overhead costs prior to setting significant revenue and just to be able to adjust cost of the final service offering. This is essential information knowing that the company has also to compete with the current pricing strategy that competitions are setting in the market. Section 3. Projected Budget Shown in Table 1 be low is the proposed flexible budget of XYZ Spa and Body Massage Parlor for its three main branches. Included in the budget proposal are varying overhead costs and unyielding overhead costs. The management in general is concerned about the aggregate overhead cost needed for the entire operation under different level of activity found on customers visits. However, it is also important to show in details the specific components of both multivariate and fixed overhead costs prior to sound decision-making process of the management (Garrison & Noreen, 2000 Cross & Richey, 1998 Fess & Warren, 1984). The basic components of variable overhead costs shown in Table 1 are spa and physical structure massage supplies, promotional incentives for the customers, and electricity (variable). On the other hand, the basic components of fixed overhead costs are wages and salaries of staffs, rent, insurance, and utilities other than electricity. Based on the current trend and economic consideration of the inflation rate, the cost of spa and body massage supplies per customers visit is $1.75. Incorporating the managements marketing strategy with its actual service, it is important to have specific budget of $5.00 per customer on promotional incentives. This is to ensure more customers to avail of the operate offered by the company at a specific limited time. This promotional activity and even the budget plan can be good only for one month but it can be extended for the entire quarter depending on the initial