Assessment_Task_1 (3)




Assessment_Task_1 (3)

Plan financial management approaches

Submission details

The assessment task is due on the date specified by your assessor. Any variations to this arrangement must be approved in writing by your assessor.

Submit this document with any required evidence attached. See specifications below for details.

Performance objective

The candidate will demonstrate the ability to plan financial management approaches.

Assessment description

In response to the scenario provided, you will clarify budget plans with your manager and negotiate changes to the budget. You will then identify and analyse a risk to the budget and prepare a contingency plan to prevent or minimise the risk.


  • Read through the scenario provided and tasks A and B.
  • Prepare to meet with your manager (assessor) to clarify budget and negotiate changes:
  • identify areas of the budget that are not achievable, inaccurate or unclear
  • prepare to negotiate necessary changes to the budget
  • set up a time with your manager to meet.
  • Meet with your manager (assessor) to clarify budget and negotiate changes.
  • identify at least two issues for clarification
  • negotiate at least two changes.
  • Submit all documents required in the specifications below to your assessor. Ensure you keep a copy of all work submitted for your records.
  • Specifications

    You must:

  • meet with your assessor to clarify budget and negotiate changes
  • provide a contingency plan.
  • Your assessor will be looking for:

  • numeracy skills to read and understand a budget and negotiate budget re-allocations
  • knowledge of basic accounting principles to identify and use account balances
  • knowledge organisational requirements related to financial management such as contained in organisational policies and procedures
  • knowledge of principles and techniques involved in budgeting.
  • Adjustment for distance-based learners

  • No variation of the task is required.
  • Documentation can be submitted electronically or posted in the mail.
  • Appendix 1 – Big Red Bicycle Pty Ltd scenario

    Big Red Bicycle is a bicycle manufacturer based in Bendigo Victoria. The company produces bicycles which it sells to retailers in the domestic Australian market.


    Assessment_Task_1 (3)
    Last updated: Feb 2024

    Page 1

    Australian market.

    The senior management structure of the company appears below.

    According to company strategic plans, the company aims to achieve a net profit before tax of $1,000,000. The chief risks to this goal are:

  • poor sales due to economic downturn
  • increases in expenses such as wage expenses.
  • In addition to Australian operations, the company is considering manufacturing overseas to take advantage of reduced costs. The company is also considering diversifying its product range to reduce exposure to poor sales of one product.


    You are the manager of Sales Centre A, based in Adelaide. The centre has achieved great success over the last year and consistently outsells other sales centres. In fact, due to the large number of accounts managed by your sales team and larger staff, your centre is expected to sell as much volume as the other two sales centres put together. Naturally, you expect cost allocations to reflect the both the needs and importance to the business of Cost Centre A.

    Task A

    The Sales General Manager, Sam Gellar has asked you to review the master budget and cost centre budgets prepared by the Senior Accountant. She would like you to meet with her to discuss the whether the budget projections are achievable, accurate, understandable and fair.

    She would like you to look at the budget for your cost centre closely, note any changes you think are necessary, develop an argument for the changes and negotiate those changes with her.

    Information you are aware of includes:

  • Sales in the first quarter (Q1), second quarter (Q2), and the fourth quarter (Q4) are generally 30% less than Q2.
  • Sales in Q2 depend on completion of 90% of repair and maintenance.
  • Commission negotiated with members of the sales team is now at 2.5%.
  • Task B

    It has come to the attention of the managing director, Tom Copeland, that due to the current economic climate, sales volume may be 20% below target this financial year. Tom is worried that this may severely impact profit projections. The company can accept as much as a 10% variance in profit projections; however, more than this could severely affect the company’s ability to pay obligations and invest. Reliable data to determine whether the risk has eventuated should be available by mid Q2, when sales data for the company’s product are in.

    As a special project, the managing director has asked you to perform a risk assessment and develop a contingency plan to manage the risk of sales falling 20%.

    As per organisational policy you should use the contingency plan template provided.

    Appendix 2 – Budgeting and finance policy

    Budget preparations

  • The business plan will set the key parameters for all financial budgeting.
  • Variations to the business plan…
  • ...

    Assessment_Task_1 (3)
    Last updated: Feb 2024

    Page 2

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