Modes of Evaluation and Development †Free Samples to Students

Question: Discuss about the Modes of Evaluation and Development. Answer: Introduction: Budget is a quantitative tool that is used by business for deciding the activities should be continued in future depending upon the generated profit and expenses (Chenhall et al. 2013). While preparing budget, it is required by business to prepare for the estimates of future sales, disbursements and collection of cash. In the current analysis, the calculation of estimated budget revenue is based on three different meals options. Budget for Mitchelton Chocolate festival is prepared for two days and budget is prepared using two variations. Without variations, the total expenses for event is estimated at $ 10232 and total amount of net profit generated is $ 24769. Now, considering variations, when the budget is prepared using variation of more than 15% of revenue, total expenses remains unchanged at $ 10232. However, there is increase in estimated net profit to $ 30019. Furthermore, considering another variation that make estimated budget less than 15% of revenue, both expenses and net profit is being altered. Total expenses is declining to $ 10004 and the amount of total profit is reducing to $ 21497. Therefore, with the variation of increasing budget more than revenue, total profits generated is increasing. There are several issues associated with the development of budget and estimated revenue or costs might be affected by any unanticipated rise in demand of services or products offered in event. It is certain that method of budget adopted might not be compatible with budgeting required for estimating cost and revenue of events (Braun et al. 2014). Preparation of budget should take into consideration the behaviour of individual and event as a whole. Reference: Braun, K.W., Tietz, W.M., Harrison, W.T., Bamber, L.S. and Horngren, C.T., 2014.Managerial accounting. Pearson. Chenhall, R.H., Hall, M. and Smith, D., 2013. Performance measurement, modes of evaluation and the development of compromising accounts.Accounting, Organizations and Society,38(4), pp.268-287.