Finance: Analysis of Budget Variance and Audit Trails

Running head: FINANCE
Finance
Name of the Student:
Name of the University:
Author Note

1FINANCE
Table of Contents
Answer to Assignment Activity 1..............................................................................................2
Actual budget.........................................................................................................................2
Answer to Assignment Activity 2..............................................................................................3
Assignment to Activity 3...........................................................................................................4
Answer to Assignment Activity 4..............................................................................................4
Answer to Question 1.............................................................................................................5
Answer to Assignment Activity 5..............................................................................................7
Answer to Assignment Activity 6..............................................................................................8
Answer to Assignment Activity 7..............................................................................................8
References and Bibliography...................................................................................................10

2FINANCE
Answer to Assignment Activity 1
Actual budget
Answer to Question 1
The figures reveal that there has been optimum variance in the case of the
employment expenses like the financial component of superannuation, wages and salaries and
other employer expenses. The degree of variance that has been obtained has been majorly in
the case of expenses and the cost of the services that are required for the purpose of business.
Answer to Question 2
The specific areas that are needed to be investigated are the expenditures that have
been incurred by business and the cost of the services that are required for the continuation of
the business services.
Answer to Question 3
The area of sales that has been generating optimum revenue in a constant rate are the
food sales and the catering fees.
The area of sales that requires due attention is the sales in regards to beverage sales.
Answer to Question 4
The expenses that need close analysis for good and bad results are essentially the
expenses that reveal a higher degree of variance. The expenses that reflect a good result are
the expenses related to water that has been incurred by the firm. However, the budget
variance reveals that most of the expenses reflect the results that are not good. These
expenses particularly are the expenses related to superannuation, wages and salaries, other
employer expenses and marketing expenses (Armitage, Webb and Glynn 2016).

3FINANCE
Answer to Question 5
The reason for the obtained results may be as follows;
 The management of the restaurant is unable to decrease the cost of sales and other
expenses (Lueg 2015)
 The management of the restaurant is unable to utilize the promotional strategies for
increasing the total amount of revenue incurred (Lueg 2015)
 The management of the firm has been spending more in financing the employees
rather than focusing on the improvement of the quality of food or services produced
(Lueg 2015)
Answer to Question 6
The concerned person to discuss will be the sales and production department of the
chosen café business.
Answer to Assignment Activity 2
The financial information that has been reflected in the financial statements of the
company indicates that the business has been following a rising trend. The total revenue of
the firm that has been incurred by the café for the financial year of 2016-17. However, the
gross profit has revealed an unfavorable variance of $19,005.19. This means that the
management of the café has not been performing as planned or estimated. However, the
particulars of the financial statement imply that the growth of the firm has been sustainable.
This can be evidently derived from the fact that the total sales of the firm has been increasing
since the financial year of 2013-14. The gross profit incurred by the café business has been
$441,225 for the financial year of 2013-14. The gross profit for the financial year of 2014-15
has been $497,300. The gross profit for the financial year of 2015-16 has been $590,000. The