Budget Preparation and Variance Analysis for Twin Rivers Café

Finance

Contents
EXECUTIVE SUMMARY.............................................................................................................3
TASK...............................................................................................................................................3
A. Objective of preparing a budget for Twin Rivers Café:....................................................3
B. Report showing the company’s revenue and spending variance for July along with
explanation:............................................................................................................................5
C. Activity of variance should be of concern to management:..............................................5
D. recommendation and Suggestions to Twin Rivers Cafe:...................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

EXECUTIVE SUMMARY
The analysis provides a complete report of the fluctuations between expected and current
revenue, expenditure and benefit estimates of the specific organization. This analysis
summarizes key plan modelling items within the Twin Rivers Café organization with the
intention of improving organization actual performance. More data includes major variability
behavior and client guidance or suggestions to reduce these deviations.
TASK
A. Objective of preparing a budget for Twin Rivers Café:
Budgets are forecasts of aggregate marketing / income and various costs associated
during the particular upcoming times pan and are usually made up and regularly assessed.
Economic plans are essential for complete activities of profitability (Yu, Miao and Leung, 2015).
An expenditure plan serves as an optical encoder enforced by overseeing employees at firms
including Twin Rivers Café and is often not required for reporting to external parties like
investors. Financial professionals take help of budgets as the primary tool of controlling costs
and revenue gaps. The higher the variability, the more cost control management help. Experts
can identify any inconsistencies among strategic cost and actual costs when trying to compare
the calculation with real numbers. A plan, besides allocation of resources, may also help set
goals, track development, and prepare contingencies. A well-designed expenditure plan or
budget plan allows a business to keep monitor of their financial location. It also allows
businesses to retain individual managers accountable to reduce expenditure and income
differences. It assists the cost accountants and strategic planners to form a sustainable planning
for future extensions through evaluating current administration expenses. Throughout this sense,
there are some main goals of budget planning as mentioned below:
Anticipate free cash flows: Plan is important for quickly-growing businesses, including
volatile income, or sales trends that are unpredictable. These companies find it difficult to
anticipate how cash they will have in the upcoming future, contributing to regular savings-related
issues (Boutilier and Lu, 2016).
Measurement efficiency: a standard purpose of creating a budget is to managing the cost
of operations by monitoring the use of financial resources. The data of past figures are
considered as financial measures to track the performance of departments. It not only reduce the