Financial Analysis Report: Budget and Expenses for Bat Country

This report analyzes the financial budget of a microbrewery, specifically focusing on deviations from the initial budget and strategies for cost control. The report highlights an increase in staffing and stock expenses, identifying potential causes such as increased material costs and higher labor rates due to experienced employees and training programs. The report suggests several measures to manage expenses, including reducing unnecessary expenditures, maximizing resource utilization, and focusing on sales strategies to avoid being driven by competitors. Additionally, it recommends efficient stock management to minimize handling costs. By implementing these strategies, the microbrewery aims to reduce actual expenditures and align them with the budget. The report references relevant academic sources to support its analysis and recommendations.

Advising Colleagues of
Budget Status

TABLE OF CONTENTS
MAIN BODY...................................................................................................................................1
Explaining reasons for deviation and suggesting ways in which expenses can be controlled1
REFERENCES................................................................................................................................2

MAIN BODY
Explaining reasons for deviation and suggesting ways in which expenses can be controlled
Bat Country is a working microbrewery and customers arrive for tasting and enjoying
beers. In the financial budget for 6 months, actual expenses are increased. Particularly, staffing
cost was budgeted at $75000 but increment of $10000 was made. Stock expenditure was also
increased. The possible reasons for deviation are numerous. First of all, cost of materials to be
incurred for making beers tends to be more, then deviation exists (Peneva and Rudd, 2017). On
the other hand, labour ie staff expenses are increased, it is affected by budgeted hour rate and
total number of hours worked by employees. If more experienced workers are used, then average
pay will be more. Moreover, training programs on them will be organized leading to hike in
staffing expenses (Chakraborty, Baeyens and Khargonekar, 2018).
Bat Country can adopt various ways for increasing efficiency and reducing costs for
keeping budget on target. It is suggested that financial expenditure should be lowered down up to
certain extent. It means that unnecessary expenses should be cut down. Resources must be fully
utilised so as to attain more profits and costs can be managed quite easily (Vazquez and et.al,
2017). Firm should make well-structured strategies in order to focus on sales so that they may
not be driven by rivals. Stock should be used quickly as brewery is perishable in nature, hence,
handling costs will be eradicated. Thus, by adopting these ways, business can control its costs
and actual expenditures will be lowered and according to the budget.
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REFERENCES
Books and Journals
Chakraborty, P., Baeyens, E. and Khargonekar, P. P., 2018. Cost causation based allocations of
costs for market integration of renewable energy. IEEE Transactions on Power
Systems. 33(1). pp.70-83.
Peneva, E. V. and Rudd, J. B., 2017. The Passthrough of Labor Costs to Price Inflation. Journal
of Money, Credit and Banking. 49(8). pp.1777-1802.
Vazquez, S. and et.al, 2017. Model predictive control for power converters and drives: Advances
and trends. IEEE Transactions on Industrial Electronics. 64(2). pp.935-947.
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