The annual budget for yourfacility has already been approved.
Two months into the budget period, you need to introduce a new item of
plant or machineryto improve one ofthe processes in yourfacility.
EPlant or machinery could be: HVAC,Waste Treatment System,
can operate) However, you are not sure whether a modification to the budget is required or to which budget (Operational Budget or Capital
Expenditure Budget) the modification is required.
Write an Options Report to the board of managementto outline the situation and give
For the new item of plant or machinery, select a regularly used, and use that for the purposes ofthis assessment
taskl. (I51 otherwords, assume yourfacility does not have this item and you have decided it is now required to improve processes in the
Find out some general information about the item including its initial cost, ongoing maintenance needs and costs, etc.
are the factorsthatwould indicate where this item needsto be budgeted for, ie operational or capital expenditure, and what factors would
influence whether a revision ofthe budget is required?
Your report must clearly explain the reasons for introducing the new item of
plant or machinery as well asthe rationale and impact for modifying the budget and which budget you recommend modifying and why.
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