Use subheadings where appropriate. Write about a page for each question. That is Q 1 a, b, c, d would be about a page in total. Please try to keep your answers on point. No ‘waffle’ or ‘making word length’. 1. (a) What are operational budgets? Don't do this (b) Name three operational budgets you are familiar with. Provide an explanation of each. (c) State clearly the key people who would be involved in the formulation of the budgets you have mentioned. (d) Indicate the key factors to be borne in mind by these key people to ensure that the budgets serve the purpose for which they are intended? 2. (a) How is the budgeted cost of sales of a trading business calculated? (b) Distinguish between budgeted gross profit and budgeted net profit. (c) From the following budgeted amounts, calculate the cost of sales, budgeted gross profit and budgeted net profit. 3. Simpson Ltd needs a Cash budget for the quarter ended 30June 20XX to give its bank along with its application for a loan. You are required to prepare the cash budget from the following information: The company expects half the sales to be paid during the month of sales and the balance during the following month. Creditors are paid in the month following the month of supply. Wages are paid during the two pay periods in each month. Balance of cash at the beginning of April 20XX was $50 400. 4. Discuss the budget process highlighting all the salient points. What steps would you take to ensure that provisions are made for any contingent situations? 5. Is a budget communication package really necessary? What should its contents be if it is necessary? 6. Explain how the work group responsible for budgets and financial plans should be working in an organisation. How would the inefficiency of other work groups in the organisation affect this work group

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