Start Up Budgeting Accounting Assignment Paper
Assignment: Start-up Budgeting
Due Week 8 and worth 240 points
For this assignment, you will decide what type of budget to implement for a start-up company.
Write a three to four (3-4) page paper in which you:
Summarize the type of manufacturing company you plan to start up and determine how you will design the value chain for your manufacturing company.
Describe the type of budget you plan to implement in your company, and outline the budgeting review steps necessary to ensure that your company reaches the financial forecast.
Select at least four (4) specific benchmarks you will utilize in your company. Explain the benchmarks selected and their benefit(s) to your company.
Explain the type of cost system you plan to implement in your company, and identify any major challenge(s) in implementing your cost system. Suggest a way to overcome the identified challenge(s).
Integrate at least one (1) quality resource using in-text citations and a reference page in your assignment. Note: Wikipedia, Investopedia, and similar Websites do not qualify as quality resources.
Format your assignment according to the following formatting requirements:
Typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date. The cover page is not included in the required page length.
Include a reference page. Citations and references must follow APA format. The reference page is not included in the required page length.
The specific course learning outcomes associated with this assignment are:
Analyze the management accountant's role in the organization.
Analyze the advantage of budgeting, the preparation of a master budget, and other forms of planning.
Discuss the allocation of costs to divisions, plants, departments, contracts, and products.
Compare and contrast the various management uses of variances.
Use technology and information resources to research issues in cost accounting.
Write clearly and concisely about cost accounting using proper writing mechanics.
Botanical Extract Enterprise
Name:
Institution:
Date:
Botanical Extract Enterprise
The Botanical Extract Enterprise is a type of differentiated product manufacturing industry that will produce the natural plant extracts for medicine and nutritional values. The products will be sold locally to the end user, distributors and commercial entities due to the market opportunity available especially for plant extracts from Echinacea, St. John's Wort, Skullcap, and Ginger. Also, the enterprise is under the differentiated manufacturing group because of the finished products it will avail in the market. On the same note, most of the products in the enterprise will be unique to those of the competitors hence they will be perceived as better and superior to those of the competitors. Therefore, the charges will be higher due to their values to the consumers. Thus, the enterprise management will be the price maker with a separate market or the individual products.
In as much as the company focuses on the premium pricing, Botanical Extract Enterprise will offer fast delivery of affordable products, invest in employee development through excellent human resource activities and initiatives as well as improvement of infrastructure to increase its market share and brand loyalty. Also, the enterprise will lay its commitment in other aspects such as helping the people save money. Besides, evaluate the suppliers and ensuring proper online shopping experience of its items.
Value Chain Analysis for the Enterprise
The value chain analysis for the Botanical Extract Enterprise follows the Porter's split categories of activities in business. All the events will be run at the optimum levels to gain the real competitive advantage in the market and for profitability besides ensuring maximum efficiency. The method will help in ensuring that all the values exceed the costs of running the activities. For example, a repeat business will be through customer loyalty. Regarding the manufacturing enterprise, the primary activities will include inbound logistics for receiving, storing and distribution of all the raw materials for the production process. Secondly, there will be operations where the plants will be processed to give out the extracts (Simatupang, Piboonrungroj & Williams, 2017). After that, outbound logistics will follow through the distribution of the products to the end users.
Besides, there will be marketing and sales of the products through advertisement, sales-force organization, promotion, selection of the distribution channels, proper management of consumers to ensure that the product reaches the targeted customers and pricing. Lastly, there will be services geared towards the performance of the goods hence activities under the category will include installation, training, repair, maintenance, after-sale services and warranty (Simatupang, Piboonrungroj & Williams, 2017).
On a separate note, the support activities for the Botanical Extract Enterprise will include procurement that will elaborate on the access or purchase of raw materials. The technology development will include constant research and development processes and the techniques in place for the production of new products, design and process automation. Thirdly, human resource management will entail proper hiring, training and retain the most qualified employees that will help in design, construction and marketing of the products in the market. Lastly, the infrastructure will entail the structure of the enterprise, the management, planning, accounting, quality-control techniques and the financial aspects of the business (Simatupang, Piboonrungroj & Williams, 2017).
After identification of the primary and supporting activities o the Botanical Extract Enterprise in discovering cost advantages, other important aspects that will feature include rating of the activities in giving value to the products and services as well as identification of the cost drivers that may result to changes in business costs. Also, there will be the identification of the dependencies and linkages as well as identification of the cost reduction and value improvement strategies (Simatupang, Piboonrungroj & Williams, 2017).
Diagram 1: Summary of the Value Chain Analysis
(Simatupang, Piboonrungroj & Williams, 2017).
Operating Budgets
The forecast of the future expenses will assist the Botanical Extract Enterprise effectively manage its financial resources and allocation to meet all the expenses. Therefore, operating budgets will be useful in this case or plan all the allocations besides evaluation of the performance and comparisons of the actual spending with the estimated figures. The kind of budget will describe the products and services that the firm expects to use in the budget period. Such income generating activities will include production, sales, and inventory of the finished products. The distinctive aspects o the budget will include the expense and revenue budgets for the coming year (Info Entrepreneurs, 2009).
Budgeting Review Steps
Reviewing a budget is essential in ensuring that the...