SITXFIN003 Manage Finances Within Budget Answers

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STUDENT ASSESSMENT BOOKLET
	Finance
	SITXFIN003 Manage finances within a budget
	SITXFIN004 Prepare and monitor budgets

Assessment Task 1: Written Questions

Task summary

  • You are to answer all written questions.

Resources and equipment required to complete this task

  • Access to textbooks and other learning materials.
  • Access to a computer, printer, Internet and applicable software (eg Microsoft Office).

When and where do I need to complete this task?

  • This task may be done in your own time as homework or you may be given time to do this task in class (where applicable).
  • Your assessor will provide you with the due date for this assessment.

What do I need to submit?

  • Your answers to each question in this task.

Instructions

  • This is an open book test – you can use your learning materials as reference.
  • You must answer all questions in this task correctly.
  • You must answer the questions bytyping your answers in Microsoft Word or a similar program. Ensure the answers are numbered to correspond with the question numbers. Your assessor will advise how to submit this assessment task.

Question 1

  • Provide an outline of what a master budget is and what it contains.

Question 2

  • Identify the four basic financial reports and outline their purpose and content.

Question 3

  • Provide a brief summary of the purpose of each of the following budgets:
  • Cash/Cash flow budget
  • Departmental budget
  • Event budget
  • Project budget
  • Purchasing budget
  • Sales budget
  • Wage budget.

Question 4

  • Identify the purpose of the following financial records:
  • Bank deposit documentation
  • Bank statements
  • Banking summaries
  • Business Activity Statements
  • Cheque books
  • Credit card transaction statements
  • Journal entries
  • Labour and wages reports
  • Merchant statements
  • Merchant summaries
  • Transaction reports.

Question 5

  • What are the requirements for a tax invoice in Australia?

Question 6

  • Research three common accounting software applications that small businesses use and summarise their functions and features.

Question 7

  • Describe three techniques commonly used for making estimates of expense budgets.

Question 8

  • Identify and outline the steps in the accounting cycle.

Question 9

  • Give three examples of negative changes in the internal organisational environment which may have to be taken into account when reviewing budgets with a view to making necessary changes.

Question 10

  • Budget formats can vary between organisations and accounting programs: list two ways a negative situation can be indicated in figures on a budget.

Question 11

  • Discuss the role of a budget and financial reports for a business.

Question 12

  • Discuss how changes in legislation can impact on a budget. Give three examples of legislation changes in the last decade that have had an impact on the hospitality industry and the profitability margins.

Question 13

  • Discuss how a hospitality business might manage and recover their profit margin in a downturn in the economy.

Question 14

  • Identify five internal sources of information that may be used as a basis for preparing a budget and forecasting income and expenditure.

Question 15

  • Identify five external sources of information that may be used as a basis for preparing a budget and forecasting income and expenditure.

Question 16

  • Identify and briefly summarise the four stages of a budget cycle.

Question 17

  1. Define the following options and approaches to budgeting:
  • Incremental budgeting
  • Zero-based budgeting.
  1. Why are ‘rolling budgets’ useful in the hospitality industry?

Question 18

  • Complete the following table to differentiate between the ‘top down’ and the ‘bottom up’ approach to negotiating budgets.

 

Description

Advantage/s

Disadvantage/s

Top down

     

Bottom up

     

Question 19

  • Aside from income and expenditure, list seven different types of financial factors/results that may be forecasted in a hospitality budget and actuals reported.

Question 20

  • Food wastage is an unknown cost in Australia. One thing for sure that we know is that the cost is escalating quickly. Explain what a restaurant might calculate or consider in relation to waste when preparing financial and statistical reports. Give three examples.

Question 21

  • Explain what yield management is in relation to a hotel. Why is yield management important?

Question 22

  • Forecasted room revenue calculations are based on the number of rooms available, the number of operating days, the average room rate and the forecasted occupancy. Calculate the room revenue (to the nearest dollar) using the data in the table below.

Number of rooms available

Forecast occupancy

Average Room Rate

Operating Days p/year

Forecasted room revenue (sales)

Example: 122

75%

$105

365

$3,506,737

50

62%

$90

310

 

15

98%

$86

365

 

300

89%

$220

365

 

Question 23

Working out how much to charge for food and drink.

  1. Calculate the cost of a drink of vodka and soda (before taxes):
  • You will need the following to make one drink - 0.03L of vodka, 0.1L of soda, 0.02 kg of lime and one straw.
  • A litre of vodka costs $12.00, a litre of soda water costs $1.00, a pack of 140 straws costs $3.00 and 1kg of limes is $2.00. If 0.03L of vodka costs $0.36 work out the cost of the soda water, slice of lime and one straw.
  • What is the cost of the drink (ingredients only)?
  • If you wanted to make 500% on the drink how much would it be?
  1. What other costs may you have to calculate into the cost of this drink? List three suggestions.
  2. If half of the bag of limes were thrown out after being cut and not used, what is the cost of the waste?

Question 24

  • What are the three different ways that a statistical/financial report can show variances?

What do I need to hand in for this task?

Have I completed this?

Answers to all questions

o

Task summary

Assessment Task 2: Case Study

  • For this task you are required to answer the questions to demonstrate your knowledge of:
  • Reviewing and monitoring financial activity against a budget and recommending solutions to deviations.

Resources and equipment required to complete this task

  • Access to textbooks and other learning materials.
  • Access to a computer, printer, spreadsheet and word processing software.

When and where should the task be completed?

  • This task may be done in your own time as homework or you may be given time to do this task in class (where applicable).
  • Your assessor will provide you with the due date for this assessment.

What needs to be submitted?

  • Your answers to all questions.

Instructions

  • Read the case study below and answer all questions correctly.

Budget review

You are an Operations Manager with Marino Enterprises and oversee the operations for six of the venues. John Marino has asked you to monitor and review specific budget figures for two businesses as presented below and present an analysis of their meaning for the organisation.

The management team are keen to identify issues that need to be addressed based on an analysis and review of the budget data in order to optimise the viability of the business while retaining market share, market position and their high product and service standards.

You have been presented with the following information:

Property 1 Selected budget data

Item

Projected/Budgeted figure

Actual figure

Room Sales

20,000,000

12,000,000

Food sales

5,000,000

9,000,000

Liquor sales

3,000,000

5,000,000

Wages

2,100,000

2,500,000

Rent

1,000,000

1,200,000

Overheads

500,000

450,000

Property 2 Six month’s total sales figures

Month

$ Budget

$ Actual

July

50,000

49,300

August

54,000

56,970

September

58,000

66,160

October

62,000

65,500

November

66,000

67,570

December

70,000

69,040

Question 1

  • Use a spreadsheet program to calculate and facilitate the development of final figures for Property 1 as follows:
  • Calculate the dollar deviations for room sales, food sales, liquor sales, wages, rent and overheads.
  • Calculate the percentage deviations for room sales, food sales, liquor sales, wages, rent and overheads.
  • Indicate if the identified deviations are positive or negative.

Question 2

  • Use a spreadsheet program to calculate and facilitate the development of final figures for Property 2 as follows:
  • Total the budgeted and actual sales for the 6 months.
  • Calculate the dollar deviations for sales on a month-by-month basis.
  • Calculate the percentage deviations for sales on a month-by-month basis.
  • Calculate year-to-date budgeted totals for sales on a month-by-month basis.
  • Calculate year-to-date actual totals for sales on a month-by-month basis.
  • Calculate the dollar deviations for YTD figures on a month-by-month basis.
  • Calculate the percentage deviations for YTD figures on a month-by-month basis.

Question 3

  • For Property 1 suggest four possible causes for the variation in room sales.

Question 4

  • For Property 1 suggest four possible ways to manage the variation in room sales.

Question 5

  • Identify four possible causes of the results for food sales in Property 1.

Question 6

  • There is no need for you to investigate the ‘wages’ deviance: why might this be so?

Question 7

  • In late June Property 1 undertook a major advertising campaign that had been factored into budgets for July: given the actual results for July, what action might you suggest to management?

Question 8

  • Why would you want to conduct a major investigation into sales for September?

Question 9

  • The organisation has found out that other businesses in the chain had shown a 6% positive variation in actual sales against budgeted revenue figures: list three suggestions on what might you do about this?

Question 10

  • How might you research internal factors impacting the figures you have been given? Give three suggestions.

Question 11

  • What could you do to research external factors impacting the figures you have been given? Give five suggestions.

Question 12

  • List five internal source documents that you would need to refer to in order to determine profit performance for the food and beverage areas.

Question 13

  • Which colleagues and managers might you need to share these findings with? Give five suggestions.

Question 14

  • You briefly consider reducing staff numbers as a way of improving profit but reject the idea: what reasons might be behind this thinking?

What do I need to hand in for this task?

Have I completed this?

Answers to all questions

o

Assessment Task 3: Financial and Statistical Calculations

Task summary

  • You are to answer all written questions.

Resources and equipment required to complete this task

  • Access to textbooks and other learning materials.
  • Access to a computer, printer, Internet and word processing software (eg Microsoft Word).
  • Calculator or spreadsheet application.

When and where do I need to complete this task?

  • This task may be done in your own time as homework or you may be given time to do this task in class (where applicable).
  • Your assessor will provide you with the due date for this assessment.

What do I need to submit?

  • Your answers to each question in this task.

Instructions

  • This is an open book test – you can use your learning materials as reference.
  • You must answer all questions in this task correctly.
  • You must answer the questions bytyping your answers in Microsoft Word or a similar program. Ensure the answers are numbered to correspond with the question numbers. Your assessor will advise how to submit this assessment task.

Question 1

  • Calculate Cost of Goods sold for a bar given the following information:
  • Opening stock for the bar: $30,000
  • Closing stock for the bar: $25,000
  • Requisitions to the bar: $125,000

Question 2

  • What is the Percentage Cost Factor for the following?
  • Cost of Goods Sold: $17,800
  • Revenue: $41,786.

Question 3

  • What is the Gross Profit for the following?
  • Cost of Goods Sold: $55,962
  • Revenue: $134,000

Question 4

  • Calculate Percentage Mark-Up for the following:
  • Revenue: $15,000
  • Cost of Goods Sold: $6,934

Question 5

  • What is the Return on Proprietor’s Funds given the following?
  • Owner’s funds: $1,200,000
  • Nett profit: $365,500

Question 6

  • Calculate Current Asset Turnover Ratio (expressed as a percentage)from the following:
  • Average current assets: $2,000,000
  • Sales: $350,680

Question 7

  • What is the Gearing Ratio based on the figures below (expressed as a percentage)?
  • Average liabilities: $450,999
  • Average equities: $2,150,000

Question 8

  • Calculate the Working Capital Ratio for the following:
  • Current assets: $805,000
  • Current liabilities: $1,450,000

Question 9

  • What is the Quick Asset Ratio (expressed as a formula) for the following figures?
  • Current assets: $2,000,000
  • Stock: $55,000
  • Current liabilities: $1,300,000
  • Bank overdraft: $45,000

Question 10

  • What is the Proprietary Ratio (expressed as a percentage)given the following?
  • Total proprietorship: $375,000
  • Total assets: $1,500,000

Question 11

  • Calculate the gross profit margin percentage for the figures below:
  • Sales: $ 2,457,983
  • Gross profit: $890,816

Question 12

  • Calculate room occupancy percentage from the following:
  • Total rooms available: 1205
  • Rooms occupied: 378

Question 13

  • What is the average room rate for the following?
  • Room revenue: $66,450
  • Total rooms available: 524

Question 14

  • The following ratios are used to judge the financial stability of a business: identify if the following are used to determine the short- or long-term financial stability of a business.

Name of ratio

Short-term or Long-term

Quick asset ratio

 

Proprietary ratio

 

Working capital ratio

 

Interest coverage

 

Question 15

  • If your working capital ratio went from 2 to 1, would that generally be seen as a positive or negative movement?

Question 16

  • Your gearing ratio has moved from 0.5 to 1.0: is that generally regarded as a Positive or Negative movement?

Question 17

  • Your analysis of labour costs indicates negative deviations: what might you suggest to improve this situation?

What do I need to hand in for this task?

Have I completed this?

Answers to all questions

o

Assessment Task 4:Project

Task summary

  • For this task you are required to prepare and manage a budget over three months and prepare financial reports.

Resources and equipment required to complete this task

  • Access to textbooks and other learning materials.
  • Access to an accounting software package (your assessor will provide information for access to free software).

When and where should the task be completed?

  • This task may be done in your own time as homework or you may be given time to do this task in class (where applicable).
  • Your assessor will provide you with the due date for this assessment.

What needs to be submitted?

  • Part A – Email and draft budget for B&B managers’ discussion.
  • Part A – Memo and draft budget for discussion and approval from Betsy.
  • Part B – Memo and final budget.
  • Part C – Memo.
  • Part D – Email communication with supplier.
  • Part D – Memo to Betsy.
  • Part E – Cash flow report and memo.
  • Part F – Memo.

Instructions

Part A

You are the manager of a small bed and breakfast owned by Marino Enterprises. Comfy Inn is located in country Victoria and was purchased by the company two years ago when the long term owners decided to sell. The B&B was sentimental to John Marino and Betsy Smithas they used to stay there in their younger days. When it came onto the market they snapped it up.

Some background on the B&B – they are a small luxury homestay property that offers seclusion, privacy and romance for an adult’s only stay. There are three cabins onsite; each fully contained. They provide a full breakfast in the main house and a full bar that is open for drinks and canapés from 4pm – 6pm on Friday, Saturday and Sunday afternoons. The bar is open at other times for snacks, coffee, tea, smoothies, soft drinks and alcohol purchases.

Marino Enterprises looks after the property grounds and the manager’s wage. Everything else is the responsibility of the manager who resides onsite in the main house. Your partner is employed as the short order cook and you pay a casual cleaner. As part of the onsite manager’s role, you and your partner complete the general housekeeping duties when it is quiet.

It is budget preparation time and Betsy has asked you to meet with her to discuss the details.

Betsy has provided you with last year’s actual revenue received, broken down into accommodation, food and beverages.

REVENUE BUDGET – ACTUAL for 2015-2016

Comfy Inn B&B

 

LAST YEAR

Accommodation

Food

Beverages

TOTAL

July

3,000

1,600

1,560

6,160

August

2,800

1,800

1,600

6,200

September

2,800

1,800

1,900

6,500

October

3,600

2,400

1,800

7,800

November

3,800

3,000

1,960

8,760

December

6,000

3,800

1,700

11,500

January

8,800

3,800

1,600

14,200

February

8,800

4,000

1,600

14,400

March

3,800

3,400

1,400

8,600

April

3,600

2,600

1,200

7,400

May

3,400

2,400

1,400

7,200

June

3,200

1,800

1,500

6,500

TOTAL

$53,600

$32,400

$19,220

$105,220

  1. You will now meet with Betsy (role played by your assessor). She will provide you with the instructions for preparing your budget and allocating costs.

You will be required to actively participate in the meeting and take notes on the detail provided (by your assessor in the role of Betsy). Have this assessment work sheet with you to record the details and be prepared to ask questions to clarify the information provided.

Your assessor will give you details on when this meeting will be held.

In the meeting, you will need to confirm (take notes as required) the following:

  1. What budget you are responsible for.
  2. The increases Betsy has directed you to include into the projected income budget for the next year.
  • Accommodation
  • Food prices
  • Beverage prices.
  1. Betsy will also give you some extra considerations during your meeting. Make note of them:
  2. Betsy has also provided you with the following expenditure information that you will need to consider when preparing your cash flow budget. This data has been sourced from historical data, committed costs for the B&B and Marino Enterprises policy:
  • Marino Enterprises’ overheads are $2000. All individual businesses and departments pay this overhead in August of each year.
  • Lease payments are $1,500 monthly.
  • Combined insurance coverage to increase to $1,400 per year paid in two equal payments in March and September.
  • General repairs and maintenance to the property of $4,800 pa to be budgeted monthly.
  • Digital marketing and advertising costs will be $2,400 pa, payable monthly.
  • Charges for out-sourced laundering is $800 per month.
  • Electricity charges are payable every quarter as follows:
  • September: $2,200
  • December: $2,000
  • March: $2,400
  • June: $3,000.
  • General monthly miscellaneous expenses amount to $600/month.

You also know from your experience and the management of the property that:

  • You need to replace some linen and towels at the cost of $2000 and replace kitchenware consumables to the value of $1000 at some point in the year. You will need to decide when it is best to include this expenditure in your budget along with an explanation to Betsy as to why you think it is best budgeted for in those months.
  • The monthly cost of F&B stock is predicted to run at 40% of the food and beverage sales. You will need to calculate this cost into your projections.
  • The cost of labour is calculated at 25% of all monthly sales. You will need to calculate this cost into your projections.
  • Betsy has asked you to enter the income and expenditure data she has given you plus your projections into your accounting system to prepare the draft revenue budget for the upcoming year. You may use an accounting software package or alternatively you could use a Microsoft Excel (or similar software) spreadsheet. If you use spreadsheet software make sure you use the headings: income, cost of sales, gross profit, expenses and operating profit. Enter the data with 0 decimal places.
  1. Prepare an email that you can send to the other managers at the B&B, and John Marino seeking their input and feedback. Attach your draft budget and ensure that you provide them with enough information so that they can make a judgement of how and why you have allocated funds as you have. Submit this email to your assessor as if they were one of the managers.
  2. Print a copy of your draft budget and submit it to your assessor (in the role of Betsy) along with a memo explaining:
  • the extra expenditure for discussion and approval (beds and kitchen appliances)
  • a discussion on the internal and external factors that could have an impact on the budget. Discuss at least three internal and three external factors.

What do I need to hand in for Part A of this task?

Have I completed this?

Email and draft budget for B&B managers’ discussion

o

Memo and draft budget for discussion and approval from Betsy

o

Part B

Betsy has come back to you with some changes to be made to the draft budget. These changes will have come via email or feedback on your hard copy draft.

Betsy also thinks that you have over calculated the cost of stock and the wages at 25% is too high. She has asked you to consider options for reducing the cost of both without effecting customer service levels, the quality of product and of course the income.

She has also asked you to have the final draft of the budget back to her within the week.

  1. Provide at least three recommendations for changes to the budget that will satisfy Betsy’s requests in a memo. It is your responsibility to meet the budget so you can choose to make recommendations to increase income, decrease expenditure wherever you see fit or even negotiate not to make any changes to the expenditure.

Make the changes to your budget in the accounting software. Produce a final budget report and submit it to your assessor along with a memo outlining the changes you have (or have not) made with an explanation justifying your decisions. In your justifications include the advantages and disadvantages of accepting your changes. Submit your memo and report to your assessor by the due date.

What do I need to hand in for Part B of this task?

Have I completed this?

Memo and final budget

o

Part C

Betsy has approved your budget and you need to sit down with the short order cook to discuss the budget as they do all of the ordering and are responsible for meeting the food and beverage budget requirements. Assume that one of your recommendations to Betsy was to drop the cost of food purchases without dropping the quality. The short order cook is not happy with this decision and you need to collaborate with them to come up with the alternative options.

The B&B is known for its exquisite breakfasts and currently, all food is sourced locally from individual suppliers, and where possible, organic produce. Everything is made from scratch and most items of the menu are made with fresh ingredients. The menu is as follows:

§  Homemade bircher muesli with seasonal fruit compote and activated nuts.

§  Baked french toast with fresh seasonal fruit and blackberry compote.

§  Buttermilk pancakes with orange cardamom syrup.

§  Three egg omelette with your choice of fillings – chorizo, bacon, mushrooms, spinach, feta, goat cheese, brie, blue cheese, vintage cheddar and tomatoes.

§  Pumpkin and spinach quiche with rocket breakfast salad.

§  Eggs benedict with your choice of ham, smoked salmon, mushrooms or bacon.

§  Corn and zucchini fritters with a delectable potato rosti and breakfast salad and salsa.

§  The world’s best chicken and champagne breakfast.

§  The big breakfast with steak, pork and fennel sausages, bacon, tomatoes, mushrooms, spinach, potato rosti and toast.

§  Avocado smash with feta and oven roasted capsicum on your choice of four different breads.

§  Good ole’ bacon and eggs on your choice of bread.

You believe that there are several ways to reduce the costs.

  1. Work with one other student in the roles of manager and short order cook to discuss the final budget, explain what their role is in terms of financial management (to stay within the budget, save money where possible) and together come up with a list of at least four recommendations to reduce the costs.
  2. Write a memo to your assessor with your recommendations for reducing the cost of the menu. You will need to make sure that your recommendations do not have an impact on the level of customer service and the B&Bs reputation for exquisite breakfasts.

What do I need to hand in for Part C of this task?

Have I completed this?

Memo

o

Part D

It is September and the budget is as follows:

 

July

Budget

July

Actuals

August

Budget

August

Actuals

INCOME

       

Accommodation

3150

5020

2940

3670

Food

1680

1820

1890

2040

Beverages

1638

1680

1680

1896

TOTAL REVENUE

6468

8520

6510

7606

EXPENSES

       

Overhead

       

Stock

1,327

2,100

1,428

2,300

Lease

1,500

1,500

1,500

1,500

Repairs/maintenance

400

600

400

300

Advertising

200

200

200

200

Laundry

800

1,000

800

950

Wages

1,617

1,532

1,628

1,450

Miscellaneous

600

560

600

400

TOTAL EXPEND.

6,444

7,492

6,556

7,100

+/-

24

1,028

-46

506

Cash on hand: start

10,000

10,000

10,024

11,028

Cash on hand: end

10,024

11,028

9,978

11,534

You as the manager and the small order cook have agreed to speak to your fruit and vegetable supplier to see if there are any possibilities of reducing the cost of your purchases. You want to reduce your delivery from 4 days per week to twice a week and rather than telling them what fruit and vegetables you want, you are requesting them to select the best quality for the cheapest price, ie the cheapest on the day.

Also as part of cost savings you have had to make the decision to move away from local suppliers of shelf items such as porridge, flour, herbs and spices, sugar, etc. Now that Costco has opened you have the option of buying in bulk. You have calculated that this will save you approximately $3,000 - $4,000 per year.

  1. Enter the above budget income and expenditure amounts for July and August to produce a suitable report.
  2. Draft the communication with the supplier outlining your request and ask them to provide you with the best possible pricing structure. You will also need to influence their decision by reminding them that the B&B wants to stay with local producers and their quality is the best. Your communication should be formatted professionally and written clearly and in a suitable language for the audience. Submit this communication to your assessor.

As the manager you have been trying to cut costs in wages by doing the housekeeping yourself during the week and on Saturdays. While you have made savings you have run yourself into the ground and are exhausted. It has also meant that customer service has suffered because you are running from the office to the cabins during the two to three hour cleaning window while customers wait. Sales have been up with accommodation running at 92% occupancy over the past four months. You want to bring the casual housekeeper back in for 7 days per week. This will add approx. $4000 to your monthly expenditure.

  1. Draft a communication to Betsy regarding your evaluation of the budget – how you are feeling, how in your effort to reduce expenditure, this has caused a slump in customer service, your recommendations for changes to the budget and the impact that the changes will have – positive and negative. You will need to influence Betsy so ensure you demonstrate that your month-to-date actuals are ahead of budgetand how you are saving money. Include your report in your communication to Betsy.

What do I need to hand in for Part D of this task?

Have I completed this?

Email communication with supplier

o

Memo to Betsy

o

Part E

It’s the beginning of November and the following income and expenses are for October.

Invoices received:

Patches Fruit and Veg

$522

Dan Murphy’s

$160

Laman’s Meats

$340

Olsen Laundry

$400

Receipts:

Costco

$178

Credit Card Payments (guests):

C. James

$590

-          Accom

300

-          Food

230

-          Bev

60

F. Dunkertin

$1140

-          Accom

600

-          Food

420

-          Bev

120

M. Tan

$792

-          Accom

450

-          Food

286

-          Bev

56

J. Kelly

$1074

-          Accom

300

-          Food

410

-          Bev

364

L. Keen

$760

-          Accom

450

-          Food

310

-          Bev

0

B. Smith

$214

-          Food

214

The last two months have seen some changes. There was a major hail storm in the area which caused damage to one of the cabins. The storm caused a lot of damage and the cabin has been uninhabitable for 5 weeks across September and October. The occupancy rate has dropped to 69%. The insurance company is paying for the majority of the damage but $5,000 will need to be paid out of pocket.

Use the information above to update the budget in the blank cells.

 

September

Budget

September

Actuals

October

Budget

October Actuals

INCOME

       

Accommodation

2,940

2,028

3,780

 

Food

1,890

1,228

2,520

 

Beverages

1,995

1,296

1,890

 

TOTAL REVENUE

6,825

4,552

8,190

 

EXPENSES

       

Overhead

0

0

0

0

Stock

1,554

1,180

1,764

Lease

1,500

1,500

1,500

1,500

Insurance

700

700

0

0

Repairs/maintenance

400

380

400

Advertising

200

200

200

200

Electricity

2,200

2,200

0

0

Laundry

800

500

800

Wages

1,706

3,300

2,048

2,800

Miscellaneous

600

290

600

700

TOTAL EXPEND.

9,660

10,250

7,312

 

+/-

-2,835

-5,698

878

 

Cash on hand: start

9,978

11,534

7,143

 

Cash on hand: end

7,143

5,836

8,021

 
  1. Create a report outlining the cash flow and submit it to your assessor with an explanation of how you might recover from the deficit this month. Make at least two recommendations for cash recovery in September/October.

What do I need to hand in for Part E of this task?

Have I completed this?

Cash flow report and memo

o

Part F

It is the end of December and the actual cash amount is down 53% on the original projection. A large contributing factor is that income targets have not been met and the food and beverage budgets have been over spent by 20%. Betsy has asked you to come up with recommendations to solve the income problem, forecast for the remaining six months of the financial year and communicate the new targets and the importance of meeting budgets to the cook.

The good news is that you have heard through the grapevine that there are a number of events happening in the region in the last half of the year. These are weekday tourism events and there are a number of big construction projects where employees drive-in and drive-out for shifts Monday to Friday.

  1. What sources of information might you need to set realistic projections for the rest of the year, including finding out more information about what is coming up in the region? Make a list of at least four people or places you could seek information from.
  2. Identify at least three solutions for the income slump. The solutions should concentrate on increasing income and revenue rather than on reducing expenses.
  3. Write a memo or email to Betsy and the Cook at the B&B outlining the answers to the above questions and including a discussion aimed at the cook about the importance of meeting budget restrictions, what the cook should do if they are having trouble meeting the budget or find it challenging keeping relationships with suppliers. Submit your memo to your assessor in the role of Betsy.

What do I need to hand in for Part F of this task?

Have I completed this?

Memo

o


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