Portfolio Tasks Session 2
Once you have completed your studies from Session 1 guide material you are to:
Step 1: complete the activities below . (type your answers directly into the text boxes)
Step 2: You may need to refer back to the session guide and downloaded material.
Step 3: Where you see a group activity you will need to seek support from work or within your on line community doing the same unit
Step 4: Save to a folder on your desktop to keep all your completed Portfolio Tasks together until you upload them. You can upload then individually or wait until you have done two or three activities.
Step 5. The tutor then looks at your work and provides feedback. You can then read the feedback and keep track of your progress through Blackboard Grade Book
Group Activity 2.1
Review your agency’s operations and compare with the other participants in your group. Based on your readings on budgets, discuss and answer the following questions:
• State the various ways a revenue budget (settlement agency) can be analysed and presented.
• What is the purpose of preparing an income budget?
• What is the most important budget that will assist you in managing your business?
Individual Activity 2.1
FEES BUDGET – FORECASTING SETTLEMENT SERVICES
List some of the services offered by your agency. What would be the expected growth or decline in such services within the industry the agency operates (with reasons)?
Answer:
• Services offered:

• Expected growth / decline:

• Reasons

Individual Activity 2.2
FEES BUDGET
Design a suitable fees budget for your agency based on the following:
• estimated forecast from Individual Activity 2.1 and
• the scheduled scale of fees as set by the industry
You may include other recovery of disbursement costs (on cost recovery basis).
Use the Fee Budget Sample template attached in the Appendix 1 ( refer page 8)as a guide in the creation of your budget.
Lecture/Independent Learning
Operating expenses budget
It is important to identify and factor in all the costs involved in running the business. It is typical when displaying expenses, to group items of a similar nature together. This shows the direct costs associated with running the core business and in the case of an agency that provides two or more services it makes sense to do so. Some typical business expenses include materials, resources and stock, plant and equipment requirements, legal and banking fees, accounting fees, ongoing operating costs. Costs can be grouped into two main categories:
Fixed costs: Expenses that are incurred regardless of the level of activity for which the budget is prepared.
Rent, lease of plant, interest on loans, rates, insurance premiums, depreciation, professional fees (e.g. license)
Variable costs: Amount of expenses varies directly with the budgeted level of activity.
Raw materials (e.g. stationery), packaging, production costs, sales commissions, vehicle running costs, labour, advertising
Some examples of typical business expenses in a settlement agency include:

• Accounting fees
• Bank interest
• Bank charges
• Bookkeeping fees
• Courier
• Cleaning
• Electricity
• Equipment purchases
• Fringe benefits tax
• Insurances
• Lease of plant and equipment (e.g. photocopier)
• Lease of premises
• Legal expenses
• Licenses and permits
• Loan repayments
• Membership fees to professional associations
• Motor vehicle expenses
• Personal drawings
• Photocopying
• Printing and postage
• Professional fees
• Promotion and advertising
• Rates
• Repairs and maintenance
• Salaries and wages
• Stationery and office supplies
• Subscriptions to professional journals
• Superannuation
• Telephone rental and usage
• Travel expenses
• Vehicle registration

Individual Activity 2.3
Classify the above listing of typical expenses as either fixed (F) or variable (V).
Individual Activity 2.4
Operating expenses budget
• Identify the costs (both fixed and variable) that your agency would incur in achieving the expected level of services forecasted for in Individual activity 2.1 & 2.2.
• Complete a suitable operating expenses budget for your agency, using the sample operating expenses budget template provided in Appendix. 2 (refer page 8 )
• You may also want to separate the costs incurred for each service provided. This analysis will be useful for the next section - Budgeted income statement, where establishing the gross contribution for each service may be important in ensuring that each was profitable.
***** End of Session Two *****

Appendix 1: Fees Budget for the year ending

Service mix
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Service 1:
Estimated number of service
Fees charged ($)
Sub-total fees revenue
Service 2:
Estimated number of service
Fees charged ($)
Sub-total fees revenue
Service 3:
Estimated number of service
Fees charged ($)
Sub-total fees revenue
TOTAL ESTIMATED FESS REVENUE
Appendix 2: Operating Expenses Budget for the year ending

Fixed Variable Total
Schedule of expenses ($) ($) ($)
Rent 1,500 1,500
Government charges 2,000 2,000 4,000
Wages- office 6,000 6,000
Wages- selling 6,000 1,500 7,500
Payroll tax 600 75 675
Employee insurance 120 15 135
Stationery expenses 500 500
Depreciation - sales 500 500
Depreciation - office equipment 200 200
Discount expense 1,000 1,000
Total 17,420 4,590 22,010