zero based budget (ZBB) and produce a costing for the business game


In this coursework you need In Excel produce firstly a zero based budget (ZBB) and then produce a costing for the business game product using absorption costing.


Create a cup cake business.

Research and develop your product.

Produce a Zero Based Budget for your business

Work out a selling price based on a cost plus approach derived from using absorption costing.

Identify ‘material ‘costs assuming production of 12 cookies or muffins.

You are to assume you will employ at least two people. One could be yourself. Ensure your wage rate complies with UK law.

Calculate the direct labour cost of producing the batch of 12.

Identify and calculate the first year’s budgeted overheads (indirect costs) for your business. Identify if they are production or non production. Use Zero Based Budget

Calculate the number of cakes you need to make in your first year in order to make a profit you desire.

Calculate your Overhead absorption rate.

Using absorption costing produce a clear costing of your batch. Using ‘cost plus’ as pricing method identify the selling price of the batch and for each unit.

Construct a 12 month ZBB Income statement. You will need to identify evidence or assumptions made to support figures included. Identify Gross profit and Net profit

Excel requirements:

1. Have 7 separate spreadsheets in the workbook.

2. The tabs (e.g. sheet 1, sheet2) must be renamed:

Budgeted Income Statement, Income statement evidence/support, Final costing, Material, Labour, Production overheads & Non-production overheads.

3. Each sheet must be titled

4. The final costing sheet must reflect the overall costing of your batch in a summary format. You need to reflect all elements that make up total cost for the batch. As it is a summary, list headings with respective amounts against each. All workings should be on the subsequent pages. From the total cost then identify profit and selling price for the batch. Finally state how much you plan to sell each cake for.

5. In ALL sheets you must NOT key in totals but use formulas available within excel.

6. for each sub sheet which reflects workings (e.g. material), its total must be reflected on the total costing sheet, against that heading. Again this must not be keyed in on the summary sheet but by a link feature within Excel.

7. on all sheets, columns are to be used, in order to cast numerical data. These columns must be labelled. Clearly show workings for all totals calculated.

8. To aid the reader ensure you select an appropriate font.

9. Ensure your excel work book is structured and easy to read. Think about colours and fonts you use.

10.Basically do not forget you are communicating information on which decisions are to be made …..just like a management accountant

Do construct a name for your business.

11.Construct your excel work book in conjunction with the marking scheme that is filed in the coursework folder.


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