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BUS 5110 Unit 5 Portfolio Assignment

1) Service companies focus on projected revenue and labor costs when budgeting, rather than production or merchandise purchases like manufacturing companies. A budget for a profit-oriented service company considers projected revenue and costs. 2) Preparing a master budget involves many steps, starting with discussions on desired sales figures, which serve as a benchmark for other budgets. Budgets are prepared between different departments in large organizations. 3) Key budgeting terms learned include principal budget factor, budget slacks, budget surplus, and budget deficit. A budget surplus occurs when projected income is higher than expenses, while a deficit is when expenses are higher than income.

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Ubong Akpekong
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107 views2 pages

BUS 5110 Unit 5 Portfolio Assignment

1) Service companies focus on projected revenue and labor costs when budgeting, rather than production or merchandise purchases like manufacturing companies. A budget for a profit-oriented service company considers projected revenue and costs. 2) Preparing a master budget involves many steps, starting with discussions on desired sales figures, which serve as a benchmark for other budgets. Budgets are prepared between different departments in large organizations. 3) Key budgeting terms learned include principal budget factor, budget slacks, budget surplus, and budget deficit. A budget surplus occurs when projected income is higher than expenses, while a deficit is when expenses are higher than income.

Uploaded by

Ubong Akpekong
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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UNIT FIVE PORTFOLIO ASSIGNMENT: BUDGETING

BUS 5110 Unit 5 Portfolio Assignment: Budgeting for A Profit Oriented Service Company

Ubong Akpekong

S261953

University of the People

The service industry is essential because it provides services to customers that meet their needs

and make their lives easier. In service businesses, a customer's needs are the top priority and it is

the business's mission to satisfy their clients. Service Industries include those industries that do

not produce goods and instead provide services. Often in service industries, consumption of the

service takes place while it is in generation. Service operations provide certain intangible

services that may not be easily identifiable. Service operations can be classified into many

industries, such as banking, insurance, hospitality, advertising, logistics and consultancy.

Depending on the type of service they are providing, businesses can work with their customers in

person or online, and they usually perform a consultation with their customers before beginning

work. In service businesses, the goal is to provide an exceptional customer service experience for

the client so that they want to continue using the service.

Manufacturing and service operations answer different questions and formulate different

strategies when it comes to planning and managing the way in which their organizations

operate and grow revenue.

Service companies do not have production or merchandise purchases budgets. Instead, service

organizations focus on projected revenue and labor costs. This means while building a budget for

a for profit service company, the major things put into consideration are the projected revenue
2
UNIT FIVE PORTFOLIO ASSIGNMENT: BUDGETING
and the cost involved. This defers from a manufacturing company because other than looking at

projected sales and labor cost, also material cost and manufacturing overhead has to be

considered too.

In my readings, I discovered that the preparation of master budget involves a lot of processes
starting with the discussions on the desired sales figures which often serve as the benchmark as
every other budget depends on the sales budget. The discussion assignment really exposed me to
reading about budgets preparation processes between different departments in a very large
organization.
My reading also disclosed a term called principal budget factor which is a budget factor that is a
limiting factor, I also read about budget slacks which is the intentional overcast of expenses and
undercast of income during the budget preparatory process.
During my reading, I also learnt about budget surplus and budget deficit ad budget surplus
occurs when projected income is higher than revenue while the reverse is the case with budget
deficeit.
This week’s studies have really assisted me very well since I will now be making use of the
acquired knowledge in my very small farm accounting for my livestock production.
I will prepare the desired sales budget and follow the budget practicalized strictly so that I ensure
what works in the pages of papers works in practice. I won’t be wrong should i conclude by
saying that lessons this week as been very engaging and educational as lessons in which we
discussed on was interesting. I have learnt so much in this week’s studies and this will help me
so much in the future studies and in my private life.

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