Restaurant Budget: Preparation, Monitoring, and Analysis Report

This report provides a comprehensive analysis of a restaurant's budget, encompassing income statements, performance evaluations, and identified deviations. The analysis begins with the preparation of an income statement for the years 2013/2014, detailing food and beverage sales, associated costs, gross profit, and net profit. A key aspect of the report involves commenting on the expected budget performance, highlighting profit increases and the impact of sales and cost management. The report then moves on to preparing budgets for different quarters, offering a detailed breakdown of revenue and expenditure. Furthermore, it identifies and explains potential budget deviations within the hospitality context, such as sales volume variance and variable cost expenses. Part B of the report delves into operational metrics, including room occupancy rates, product cost calculations, and food and beverage sales figures. The report concludes by suggesting corrective actions to rectify situations and improve sales, emphasizing the use of surveys and internal controls to enhance service quality and customer satisfaction. The report utilizes financial data and calculations to provide a thorough examination of the restaurant's financial health and operational efficiency.

Running head: PREPARE AND MONITOR BUDGET
Prepare and Monitor Budget
Name of the Student:
Name of the University:
Authors Note:

PREPARE AND MONITOR BUDGET
1
Table of Contents
Task 1:........................................................................................................................................2
1. Preparing the income statement.............................................................................................2
2. Commenting on the expected budget performance:...............................................................5
Task 2: Preparing the Budget for different quarters...................................................................5
Task 3: Depicting the 4 budget deviation that could be occurred from hospitality context......7
Part B:.........................................................................................................................................7
1. Identifying the number of rooms occupied............................................................................7
2. Identifying the occupancy rate...............................................................................................8
3. Calculating the product cost %:.............................................................................................9
4. Calculating the work cover %:...............................................................................................9
5.1 Food $ sales value:...............................................................................................................9
5.2 Food purchase $ figure:........................................................................................................9
5.3 Alcohol beverage purchase $ figure:..................................................................................10
5.4 Rent $ figure:......................................................................................................................10
6. Depicting the corrective action that needs to be conducted to rectify the situation and
improve sales back to budget:..................................................................................................10
Reference and Bibliography:....................................................................................................12

PREPARE AND MONITOR BUDGET
2
Task 1:
1. Preparing the income statement
Restaurant 2013/2014
Actual sales July October January April Total
Food sales 135,455.6
3
135,455.6
3
135,455.6
3
135,455.6
3
541,822.5
0
Beverage sales 75,367.6
8
75,367.6
8
75,367.6
8
75,367.6
8
301,470.7
3
Total 210,823.3
1
210,823.3
1
210,823.3
1
210,823.3
1
843,293.2
3
Restaurant 2013/2014
Profit/loss statement July October January April Total
Revenue
Item
Food sales 135,45
5.63
135,455.
63
135,455.
63
135,455.
63
541,822.
50
Beverage sales 75,36
7.68
75,367.
68
75,367.
68
75,367.
68
301,470.
73
Total 210,82
3.31
210,823.
31
210,823.
31
210,823.
31
843,293.
23
Costs

PREPARE AND MONITOR BUDGET
3
Item
Food cost 46,58
3.32
46,583.
32
46,583.
32
46,583.
32
186,333.
28
Beverage cost 30,59
7.09
30,597.
09
30,597.
09
30,597.
09
122,388.
38
Total 77,18
0.41
77,180.
41
77,180.
41
77,180.
41
308,721.
66
Gross profit
Food 88,87
2.30
88,872.
30
88,872.
30
88,872.
30
355,489.
22
Beverage 44,77
0.59
44,770.
59
44,770.
59
44,770.
59
179,082.
36
Total 133,64
2.89
133,642.
89
133,642.
89
133,642.
89
534,571.
58
Less expense
Wages 55,21
0.59
56,728.
88
56,728.
88
56,728.
88
225,397.
24
employee benefits 9,08
4.27
9,084.
27
9,084.
27
9,288.
66
36,541.
47
Direct operating expense 8,78
2.13
8,782.
13
8,782.
13
8,782.
13
35,128.
52
Music and entertainment 1,89
3.40
1,893.
40
2,978.
00
2,978.
00
9,742.
79
Advertising and promotion 4,58 4,589. 4,589. 4,589. 18,357.

PREPARE AND MONITOR BUDGET
4
9.41 41 41 41 63
Power and phone 3,90
7.65
4,171.
41
4,171.
41
4,171.
41
16,421.
88
Administrative and general 7,73
4.72
7,734.
72
7,734.
72
7,734.
72
30,938.
88
Repairs and maintenance 6,14
8.05
6,148.
05
6,148.
05
6,148.
05
24,592.
20
Music purchase 5,600.
00
5,600.
00
Total 97,35
0.21
99,132.
27
105,816.
87
100,421.
27
402,720.
61
Less occupation and
finance cost
Interest 2,10
6.25
2,106.
25
2,106.
25
2,106.
25
8,425.
00
Depreciation 4,06
8.79
4,068.
79
4,068.
79
4,068.
79
16,275.
14
Rates 1,07
7.50
1,077.
50
1,077.
50
1,077.
50
4,310.
00
Insurance 1,86
0.24
1,860.
24
1,860.
24
1,860.
24
7,440.
94
Net profit 27,17
9.92
25,397.
86
18,713.
25
24,108.
86
95,399.
89

PREPARE AND MONITOR BUDGET
5
2. Commenting on the expected budget performance:
After the overall evaluation, expected budget performance could mainly help in
identifying the relevant profits, which will increase from 86,739.91 to 123,347.77. This is
mainly due to the increased selling price, while reduced increment in cost associated with the
operations (Aureli and Del 2016). The overall profitability is substantially increased for the
budgeted year, due to the increment in sales obtained by the organisation. However, the
evaluation of quarterly budget revenue mainly helps in stating the overall income that is been
generated by the company in different quarters. The overall expected quarterly budget
performance of the organisation has relatively declined over the period, which was mainly
conducted due to the increment in expenses conducted by the organization. The expectation
of the budget is mainly not adequate, where the returns of the organisation are not adequately
increasing in later quarters. The net income of the company after the July quarter has mainly
declined due to the increment in expenses that is incurred by the organisation. Altogether the
overall performance of the budget is relatively increasing in comparisons from previous fiscal
year.
Task 2: Preparing the Budget for different quarters
Financial year 2013/2014
Particulars Q1 Q2 Q3 Q4 Total
Revenue
Food sales 242,843.5
4
242,843.5
4
242,843.5
4
242,843.5
4
971,374.1
4
Beverage sales 170,722.3
6
170,722.3
6
170,722.3
6
174,990.4
2
687,157.4
9
Total 413,565.8 413,565.8 413,565.8 417,833.9 1,658,531.6

PREPARE AND MONITOR BUDGET
6
9 9 9 5 3
Expenditure
Function centre
rent
49,350.0
0
49,350.0
0
49,350.0
0
49,350.0
0
197,400.0
0
Wages 130,755.0
0
130,755.0
0
132,389.4
4
132,389.4
4
526,288.8
8
Food costs 125,976.9
8
125,976.9
8
125,976.9
8
125,976.9
8
503,907.9
3
Beverage costs 58,029.7
5
58,029.7
5
58,029.7
5
60,931.2
4
235,020.4
9
Business insurance 1,321.0
0
1,321.0
0
1,321.0
0
1,321.0
0
5,284.0
0
Electricity 1,176.4
5
1,176.4
5
1,176.4
5
1,176.4
5
4,705.8
1
Gas 1,035.4
1
1,035.4
1
1,035.4
1
1,035.4
1
4,141.6
3
Party hire 15,209.7
6
15,209.7
6
15,209.7
6
15,209.7
6
60,839.0
3
Laundry 1,397.5
0
1,397.5
0
1,397.5
0
1,397.5
0
5,590.0
0
Chemicals 3,113.2
5
3,113.2
5
3,113.2
5
3,113.2
5
12,453.0
0
Total 387,365.1
0
387,365.1
0
388,999.5
4
391,901.0
2
1,555,630.7
6
Profit and loss 26,200.7 26,200.7 24,566.3 25,932.9 102,900.8

PREPARE AND MONITOR BUDGET
7
9 9 6 3 7
Task 3: Depicting the 4 budget deviation that could be occurred from hospitality
context
The four budget deviation that could be identified from the overall valuation is the
relevant sale volume variance, direct material variance, variable cost expenses and variance
in growth expectation. These relevant variations could directly reduce the overall benefits,
which might be portrayed by the budget. The identified deviation could only be reduced by
adequate control measures. However, if increment in sales volume and piece is identified
then the higher price could boots more income generation conducted by the company (Cohen
2015).
Part B:
1. Identifying the number of rooms occupied
Particulars Value
Number of rooms 520
Occupancy rate 72%
Number of rooms occupied 374
Number of rooms 520
Occupancy rate 96%
Number of rooms occupied 499
Number of rooms 520

PREPARE AND MONITOR BUDGET
8
Occupancy rate 85%
Number of rooms occupied 442
Number of rooms 520
Occupancy rate 79%
Number of rooms occupied 411
2. Identifying the occupancy rate
Particulars Value
Number of rooms 480
Number of rooms occupied 400
Occupancy rate 83%
Number of rooms 480
Number of rooms occupied 375
Occupancy rate 78%
Number of rooms 480
Number of rooms occupied 315
Occupancy rate 66%
Number of rooms 480
Number of rooms occupied 420
Occupancy rate 88%

PREPARE AND MONITOR BUDGET
9
3. Calculating the product cost %:
Particulars Value
Selling price (A) 4
Purchase price (B) 1.5
Product cost % (C=B/A) 37.50%
4. Calculating the work cover %:
Particulars Value
Restaurant (A) 9750
Work cover % (B) 1.63%
Total wages cost (C=A*B) 158.44
5.1 Food $ sales value:
Particulars Value
Food sales (Dining room) 1,008,800
Incremental percentage 4%
Increment in 13/14 0.93
No increment 1/14 0.07
Food sales (Dining room) 1,046,270
5.2 Food purchase $ figure:
Particulars Value