Smart Money Moves Training: Budgeting Basics
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Questions and Answers

What is one benefit of offering tiered ticket options for an event?

  • They provide special perks for those willing to pay more. (correct)
  • They increase the pricing confusion among customers.
  • They allow all attendees to purchase the same ticket type.
  • They limit the audience to only high-income individuals.

    • What strategy can increase attendance and inclusivity for events?

  • Setting a single price for all attendees.
  • Limiting ticket sales to early buyers only.
  • Offering special rates for group purchases. (correct)
  • Implementing only regular ticket sales.

    • Which method is used in price anchoring for events?

  • Providing tickets at a fixed price with no discounts.
  • Reducing ticket prices arbitrarily without a strategy.
  • Offering free entry to all attendees to increase traffic.
  • Introducing tiered ticketing along with time-sensitive pricing. (correct)

    • What example best illustrates the concept of price anchoring?

    <p>$1,000 priced as a premium, followed by a lower price of $500.</p> Signup and view all the answers

    What types of groups might benefit from discounts as part of price anchoring strategies?

    <p>Groups such as students, military personnel, and academics.</p> Signup and view all the answers

    What is the total amount of expenses logged for Consulting from the data provided?

    <p>Rp181,351</p> Signup and view all the answers

    Which division incurred the highest single expense according to the provided data?

    <p>Legal and Finance</p> Signup and view all the answers

    What is the total amount of expenses recorded as of 9/27/2024?

    <p>Rp1,304,351</p> Signup and view all the answers

    Which expense amount corresponds to the date 8/28/2024?

    <p>Rp52,000</p> Signup and view all the answers

    How many total entries or instances of expenses were logged before 9/27/2024?

    <p>5</p> Signup and view all the answers

    What common feelings are typically associated with budgeting?

    <p>Fear and anxiety</p> Signup and view all the answers

    Which of the following best describes a 'budget'?

    <p>A detailed financial plan that quantifies future expectations</p> Signup and view all the answers

    What is one key purpose of budgeting stated in the content?

    <p>To avoid future financial issues</p> Signup and view all the answers

    Which reserve type is specifically mentioned in budgeting?

    <p>Management Reserve</p> Signup and view all the answers

    What aspect of budgeting is frequently considered negative by employees?

    <p>The rigid structure it imposes</p> Signup and view all the answers

    What might cause reluctance in employees when it comes to budgeting?

    <p>The perception of budgeting as tedious</p> Signup and view all the answers

    Which of the following is a budgeting component aimed at managing unexpected costs?

    <p>Contingency Reserve</p> Signup and view all the answers

    What is the typical implication of seeing budgeting as dread and drudgery?

    <p>Reduced employee involvement in financial planning</p> Signup and view all the answers

    What must be completed regarding the fixed fee before the services are finished?

    <p>It must be settled one week before completion.</p> Signup and view all the answers

    Which of the following categories is NOT typically included in a Chart of Accounts?

    <p>Debt Management</p> Signup and view all the answers

    What is the significance of maintaining timely financial commitments between vendor and client?

    <p>It maintains service quality and aids in debt management.</p> Signup and view all the answers

    Which of the following represents a liability in the Chart of Accounts?

    <p>Unearned Rent</p> Signup and view all the answers

    In which section of the Chart of Accounts would 'Wages Expense' be listed?

    <p>Expenses</p> Signup and view all the answers

    What is the purpose of categorizing financial transactions in a Chart of Accounts?

    <p>To enhance financial reporting and analysis.</p> Signup and view all the answers

    Which type of asset is classified as the most liquid according to the given information?

    <p>Cash</p> Signup and view all the answers

    What is NOT a sub-account type listed under Expenses in the Chart of Accounts?

    <p>Fixed Assets</p> Signup and view all the answers

    What is a primary factor influencing the choice of pricing strategy for event companies?

    <p>Event objectives</p> Signup and view all the answers

    Which pricing strategy is designed to attract customers with a low price point initially?

    <p>Penetration</p> Signup and view all the answers

    Which of the following is not mentioned as a method for pricing services in the event industry?

    <p>Pricing by flat rate</p> Signup and view all the answers

    What are the components of 'Money Out' for a business?

    <p>Expenses and Services/Products In</p> Signup and view all the answers

    What is one of the first questions an event planner should ask to assess their revenue?

    <p>How much money am I bringing in?</p> Signup and view all the answers

    Which pricing strategy involves charging based on a pre-determined percentage of sales?

    <p>Pricing by Percentage</p> Signup and view all the answers

    What initial invoice percentage is due before a service begins as per the payment terms outlined?

    <p>20%</p> Signup and view all the answers

    Which of the following is considered an asset of a business?

    <p>Property owned</p> Signup and view all the answers

    What is the impact of increasing the number of consulting projects handled by 180 Degrees Consulting ITS?

    <p>Operational costs will increase due to factors such as transportation.</p> Signup and view all the answers

    Which type of cost remains constant regardless of the level of activity?

    <p>Fixed cost</p> Signup and view all the answers

    How does the average cost of training handouts change with an increasing number of training sessions?

    <p>Average costs decrease as more handouts are distributed.</p> Signup and view all the answers

    What is a key aspect of cost behavior that is important for decision-making?

    <p>Predicting how costs will respond to activity changes</p> Signup and view all the answers

    What happens to the subscription cost for SAS Analytic if presentation sessions to clients increase?

    <p>The subscription cost remains constant regardless of sessions.</p> Signup and view all the answers

    Which of the following correctly describes semi-variable costs?

    <p>They have both fixed and variable components.</p> Signup and view all the answers

    Why is cost structure considered the foundation of cost classifications?

    <p>It categorizes costs based on their relation to activity levels.</p> Signup and view all the answers

    Increasing the frequency of client presentations has what effect on the SAS Analytic subscription?

    <p>It does not affect the subscription cost at all.</p> Signup and view all the answers

    Study Notes

    Smart Money Moves Training

    • Financial skills training for suitable organization
    • Training and Upgrading "INI LHO ITS! 2025"
    • Instructor: Regita Ahda Santi

    Module Section: Planning and Budgeting

    • Revenue and Expense
    • Debt and Vendor Management
    • Financial Reporting and Analysis
    • Test your skills

    Budgeting Basics and Beyond

    • Budget preparation process can be seen as arduous and restrictive, eliciting reluctance from employees
    • Budgeting is often associated with fear or anxiety (dread) and tedious tasks (drudgery)
    • Budgeting is a detailed financial plan that quantifies future expectations and actions relative to acquiring and using resources
    • Budgets don't guarantee success, but can help avoid future problems

    Budgeting in Organizations

    • Strategic Planning, Long-term planning
    • Program Planning, Mid-term planning
    • Budgeting, Short-term planning
    • Understanding organizational systems for budgeting
    • Using accrual and cash basis for financial reporting

    Know the Cost Behavior

    • Cost behavior patterns are fundamental in planning, control, and decision-making as they provide insights into how costs react to changes in business activities
    • Cost behavior analysis example: Number of projects, training sessions, presentation sessions impact total costs
    • Types of cost behavior: Fixed, Variable, and Mixed.

    Cost Classifications for Predicting Cost Behavior

    • Fixed costs: Remain constant (e.g., rent, salaries)
    • Variable costs: Vary directly with activity (e.g., materials, labor)
    • Semi-variable costs: Have both fixed and variable components (e.g., utilities)

    Fixed Costs vs Variable Costs

    • Fixed Costs: Costs that do not vary with the level of activity within the relevant range (rent, insurance, fixed salaries etc.)
    • Variable Costs: Costs that vary directly and proportionately with the level of activity within the relevant range (direct materials, variable labor, cost drivers etc.)

    Event Pricing

    • Pricing is determined by the estimated cost of holding an event and other factors
    • Pricing Objectives: Survival, Product-quality leadership, Market skimming, Maximum current profits, Maximum market share
    • Elements of Event Pricing: Cost of Holding an Event, Initial Mark-up, and Other elements
    • Dynamic Pricing Model: Dynamically adjusting prices based on demand
    • Sponsor-supported Discounts: Offering discounts to event sponsors
    • Exclusive Value Additions: Enhanced amenities for premium event ticket buyers (meet-and-greets, VIP seating, special merchandise etc.)
    • Family or group packages: Group discounts for attendees

    Price Anchoring

    • Price anchoring is a pricing strategy that sets a high price (anchor) to attract customers while offering a lower price, to make the lower price appear more attractive
    • This method can be used with tiered ticketing, discounting, and time-sensitive pricing

    Pricing Strategies Lead to Revenue

    • Several common pricing strategies exist:
      • Skimming (High-price, low-volume)
      • Premium (High-price, high-volume)
      • Economy (Low-price, low-volume)
      • Penetration (Low-price, high-volume)
    • These strategies are used to achieve various company objectives

    What Do You Want to Know About Your Business?

    • Money In: Sales, Revenue
    • Money Out: Expenses, Cost
    • Understanding how much money a company brings in, spends, and if it is profitable
    • What are company assets, liabilities and equity

    Chart of Accounts (COA)

    • A structured listing of all financial accounts in an organization's general ledger.
    • Categorization of financial transactions systematically (assets, liabilities, equity, revenues, expenses)

    Financial Statements Concept

    • Income Statement: Period of time that shows profitability (revenue, expenses, profitability)
    • Cash Flow Statement: Period of time that shows cash movements (increases and decreases)
    • Balance Sheet: A point in time that shows financial position (assets, liabilities, shareholders' equity, cash balance, retained earnings)

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    Description

    Test your knowledge of budgeting concepts and practices with this training quiz. Explore essential financial skills related to planning, budgeting, and financial reporting that are crucial for organizational success. Whether you're new to budgeting or looking to refine your skills, this quiz will provide valuable insights.

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