SITXFIN003 - Budgeting: Financial Planning and Control Guide.

This assignment focuses on managing finances within a budget, covering various aspects such as budget types, the budget cycle, resource allocation, and the importance of budget control. It delves into comparing actual performance figures with budgeted figures, examining financial records, and understanding financial commitments. Variance analysis, reasons for budget deviations, and strategies for managing them are also discussed. Furthermore, the assignment explores trend analysis for improvement, cost and resource assessment, and methods to enhance expense and payroll management. It concludes with recommendations for improved budget management, emphasizing the importance of considering the impact of changes and effective communication of these recommendations. The assignment also includes a practical task involving a hotel's financial commitments and budget analysis for a bistro, culminating in a report to bistro staff outlining budget status, performance, and necessary adjustments.

Manage finances within a
budget

TABLE OF CONTENT
SECTION 1......................................................................................................................................7
Q1 What is a budget and how does it help a business achieve its goals? ...................................7
Q2 What determines how business funds are divided amongst different departments and
project ?........................................................................................................................................7
Q3What is the difference between a fixed (static) and flexible (variable) budget? ....................7
Q4 What is a cash flow budget and what is it used for? .............................................................7
Q5 What is a profit and loss budget and what is it used for? ......................................................7
Q6 What is a budget cycle?.........................................................................................................7
Q7 What is a budget cycle? ........................................................................................................8
Q8 What must you do when budget priorities are changed? Explain why..................................8
Q9 Your budget allows only a limited amount of funding for wages. Who needs to know about
these types of resource decisions? Explain why..........................................................................8
Q10 List two ways you can promote awareness of the importance of budget control................8
Q11 How does promoting the importance of budget control help you achieve team or work
area goals? (Briefly explain 2 examples).....................................................................................8
Q12 Why is it important to record resource allocation? .............................................................8
Q13 Budgets are not the only source of information relating to where resources are allocated
and controlled within a business. List four other records used to show resource allocation.......8
SECTION 2......................................................................................................................................9
Q1 Why do we record and compare actual performance figures with budgeted figures? ..........9
Q2 How often should you check actual income and expenditure figures against budgets?........9
Q3 List six types of financial records you can use to check income and expenditure
information...................................................................................................................................9
Q4 What is one benefit of using computerised systems to maintain financial records?..............9
Q5 What are financial commitments in a business? ...................................................................9
Q6 List two examples of financial commitments for a business in your industry sector............9
Q7 There are four basic types of expenses you need to record in financial documents to ensure
accurate monitoring. Describe and give one example for each type...........................................9
Q8 What are the formulas used to calculate a budget variance and a budget variance
percentage?................................................................................................................................10

Q9 Check the figures in the sales budget below. Which department’s figures have been
calculated correctly?..................................................................................................................10
Q10 Indicate if the following budget results are a favourable or unfavourable result..............10
Q11 What are the four main reasons budget deviations occur? ................................................10
Q12 What factors do you need to consider when deciding whether or not a budget deviation
should be investigated further? ( Give 3 examples)...................................................................10
Q13 List three options you might consider to help manage budget deviations effectively.......10
Q14 List four types of information about budget targets you should discuss with staff
members.(Briefly explain them)................................................................................................11
SECTION 3....................................................................................................................................11
Q1 How does trend analysis help identify areas for improvement in budget performance? ....11
Q2 What are two questions you should be asking when assessing existing costs and resources?
....................................................................................................................................................11
Q4 What approaches or possible options can you investigate further to control and improve the
management of expenses in a business? (..................................................................................11
Q5 What approaches or possible options can you investigate further to control and improve the
management of payroll expenses in a business?........................................................................12
Q6 List three approaches or possible options you can investigate further to control and
improve the management of accounts payable in a business.....................................................12
Q7 List three main methods businesses use to increase their profits.........................................12
Q8 Providing recommendations for improved budget management and set new budget targets.
....................................................................................................................................................12
Q9 what is the impact of any changes must be considered when developing new approaches
or changes to budget management along with advantages and disadvantages .........................12
Q10 How should you present your recommendations for improved budget management? .....13
Q11 List three examples of the type of information you should include when presenting or
communicating about recommendations for budget management............................................13
SECTION 4....................................................................................................................................13
Q1 What information might you need to include when preparing a statistical or financial report
for the supervisors in a suburban hotel?....................................................................................13

Q2 What information might you need to include when preparing a formal statistical report for
the management team of a large events or reception centre along with example ?.................13
Q3 How can you present reports to enable informed decision-making along with example ?
....................................................................................................................................................14
Q4 How do you know when to complete reports? ...................................................................14
Q5 Explain how the features of accounting software programs can assist you to manage
budgets.......................................................................................................................................15
TASK 1..........................................................................................................................................16
Q1 list the hotel’s financial commitments under their correct cost category. Name at least two
commitments for each category.................................................................................................17
Q2 The four categories of cost in which most fund has been allocated by the hotel along with
June quarter amount ..................................................................................................................17
Q3 Why have significant funds been allocated to these categories? Discuss their importance
to the business and consequences if inadequate funds are allocated.........................................17
Q4 Using the Bistro departmental budget – April. You are holding a team meeting to discuss
the financial targets provided in the organisational and April bistro budgets. What information
do you need to communicate to the team to ensure they understand the targets and goals to be
achieved?....................................................................................................................................18
Q5 What techniques can you use to promote awareness of methods of controlling costs or
increasing sales so you can achieve budget targets?..................................................................18
TASK 2: CALCULATE VARIANCES .......................................................................................18
TASK 3..........................................................................................................................................22
Q1 Are there any significant variances in the sales figures that you should be concerned
about? Explain what the results indicate and why you are/are not concerned about them........22
Q2 Are there significant variances in any of the expenses categories that you think should be
investigated further? If yes, discuss which categories and why you think they need
investigation. If no, discuss why the deviations do not warrant investigation..........................22
Q3 Based on your responses to questions 1 and 2, what is your overall evaluation of the
budget results? Is the bistro meeting its financial targets? .......................................................22
Q4 Which expense category has the most funds allocated to it? Explain why it is important
you manage costs in this category carefully..............................................................................22

Q5 Using the results and information obtained from the April comparative report, your
answers to the previous questions and the background information.........................................23
Write a transcript of the outcomes of your report ready to deliver to the bistro staff at the next
team meeting. ............................................................................................................................23
The transcript should include the following information. The current status of the budget; is
the work area meeting its budget targets, is it on track to meet June quarter budget targets?
Which areas are underperforming or performing better than expected?What changes, if any,
need to be made to help the team meet next month’s budget targets?An outline of budget
targets for May. Organisational factors that contributed to the setting of these targets............23
REFERENCES..............................................................................................................................25

SITXFIN003 – Manage finances within a budget
Worksheets
SECTION 1
Q1 What is a budget and how does it help a business achieve its goals?
Budget is the estimation of the income and expenditure for a given set of time.
Its main purpose is helping a business, government or any other organization for making or
spending money.
Q2 What determines how business funds are divided amongst different departments and project ?
The fund manager is the person who ensures the management of the funds and their division in
the different department as per their needs and requirement for their operations.
Q3What is the difference between a fixed (static) and flexible (variable) budget?
Fixed budget is the plan which is considered to be useful for the single level of sales and also
helpful for the measurement of the activity (Arsani and Sihombing, 2020). However, the variable
budget is the changes which happens in the activity for the level of production units for the static
changes.
Q4 What is a cash flow budget and what is it used for?
Cash flow budget is the estimation of all the cash receipts and all the cash expenditure which is
expected the occurrence during a certain time period. It is used for estimation of monthly or
yearly cash income or expenditure which is well framed items.
Q5 What is a profit and loss budget and what is it used for?
It is a budget which is the summary of the expected income and expected expense which is
prepared for a shorted or a longer period depending on the use of the budget.
Q6 What is a budget cycle?
Financial Vaibliltiy is the ability of the generation of sufficient income for meeting operating
payments.
Profitability is the measurement of the profit of the business relative to its expenses for more
efficiency for realizing more profit as a percentage of its expenses.
Liquidity refers the ease which an asset or security has for the conversion of the ready cash for
affecting the market price.

Q7 What is a budget cycle?
Budget cycle is also known as the life of a budget which is useful from the creation and
preparation to its evaluation.
Q8 What must you do when budget priorities are changed? Explain why.
A comparison needs to be made with the budget and the spending for scrutinizing scope that is
present between the difference. It is essential for the business to understand of the change of
order which affects the costs.
Q9 Your budget allows only a limited amount of funding for wages. Who needs to know about
these types of resource decisions? Explain why.
The fund manager is the individual that is responsible for the management of the amount of fund
that is presented for the wages (Choi and et.al., 2021). This is because it allows the organization
to keep the responsibility with an individual.
Q10 List two ways you can promote awareness of the importance of budget control.
Keeping the budgeting process and the forecasting flexible would help the business in the
management of the organization. Implementation of the rolling forecast and budgets is also a
very effective way of promoting budget control.
Q11 How does promoting the importance of budget control help you achieve team or work area
goals? (Briefly explain 2 examples)
The promotions of budget control helps the business in the achievement of business owner for
the cash flow, reduction of the profits that are helpful for increasing returns on investment
budget. Budgeting is the helpful for success for planning and control of the business.
Q12 Why is it important to record resource allocation?
It is important record resource allocation because of the project management for the providing
the clear picture of the amount for working for the what has not been done.
Q13 Budgets are not the only source of information relating to where resources are allocated and
controlled within a business. List four other records used to show resource allocation
The best practice for the allocation of resource is through the assigning of the best visible for
fitting the first available for resources. It allows the uniform distribution of the skilled resource
which helps the organization in multiple projects for deploying them for high priority.

SECTION 2
Q1 Why do we record and compare actual performance figures with budgeted figures?
Budget figures are compared for starting up a especially understanding of the data of the
business. It helps the organization in better for accurately forecasting the metrics for planning a
realistic budget.
Q2 How often should you check actual income and expenditure figures against budgets?
Checking the income and expenses of the business quarterly helps the business to understand the
details of the net income and profit (Nwaorgu and Alozie, 2017).
Q3 List six types of financial records you can use to check income and expenditure information
 Profit and Loss account
 Cash flow analysis
 Fund flow analysis
 Balance sheet
 Statement of equity
 Income statement
Q4 What is one benefit of using computerised systems to maintain financial records?
The computerized accounting system is helpful for reducing the time that is spent on a manual
process which is directly important for the business in increasing efficiency.
Q5 What are financial commitments in a business?
It is a commitment which is considered to be helpful for the management of the expenses for the
future date. It helps the business finances for giving a date for commitment in pledge towards
paying something.
Q6 List two examples of financial commitments for a business in your industry sector.
Financial commitment is when a purchase order is sent to supplier that helps the organization in
the making a pledge to pay on a specific date.
Q7 There are four basic types of expenses you need to record in financial documents to ensure
accurate monitoring. Describe and give one example for each type.
Cost of goods sold — cost of materials needed for production.
Operating expenses — Wages and Salaries
Non Operating expenses – Interests payment
Financial Expenses – Loan origination fees

Q8 What are the formulas used to calculate a budget variance and a budget variance percentage?
The formula used for budget variance is
(Actual amount spent- budgeted amount)
This provides the budget variances.
The formula for percentage of budget variance is
(Budget variance * 100)/ budget amount.
Q9 Check the figures in the sales budget below. Which department’s figures have been
calculated correctly?
The club bar meals budget variance has been calculated accurate because the correct formula is
used in which the actual amount spent is subtracted from the budgeted amount.
Q10 Indicate if the following budget results are a favourable or unfavourable result.
Actual income is above budget:- Favourable result
Actual income is below budget:- Unfavourable result
Expenses are above budget:- Unfavourable result
Expenses are below budget:- Favourable result
Q11 What are the four main reasons budget deviations occur?
Budget deviation occur because of the following reasons,
 Errors while calculating or preparation of budget.
 Changes in the business conditions can also be the reason for budget deviation.
 Unmet expectations also results in budget deviation.
 Wrong assumptions or relying on a bad data.
Q12 What factors do you need to consider when deciding whether or not a budget deviation
should be investigated further? ( Give 3 examples)
Certain factors which are needed to be considered before the changes in budget deviation are,
 Time delay can be a great issue.
 Source of variance which can created the change (Slyter and et.al., 2017).
 Detailed analysis for understanding the every factor for the change.
Q13 List three options you might consider to help manage budget deviations effectively.
Three best ways in which the budget deviation can be managed are,
 Comparison of the budget with the actual budget for the preparation of budget deviation.
 Identification of relationships for budget deviations.

 Forecasting the changes in the as pattern for getting prepare for the budget deviation.
Q14 List four types of information about budget targets you should discuss with staff members.
(Briefly explain them)
Budget can be used for motivating the employees because it motivates the employees and
managers when they get to know about the incentives, budgeting process, departmental
investment and goals and objective of the budget.
SECTION 3
Q1 How does trend analysis help identify areas for improvement in budget performance?
Trend analysis helps the business in the identification of the improvement in the budget through
the identification of the any consistent results or trends. It is done by understanding the business
and performing the prediction of the current business operations and practices taken by the
organization.
Trend analysis aids to identify the areas which is under performing and giving prediction
to inform decision (Dong, Wang and Zhang, 2021). Budget performance can be properly
evaluated with having proper trend analysis through comparing between two or more period. It
aids in making significant evaluation of lacking areas making proper evaluation.
Q2 What are two questions you should be asking when assessing existing costs and resources?
Questions
a: there is efficient availability of resources to allocate, analyze and control overall functioning?
b: Applied cost can be declined by eliminating irrelevant factors?
Q3When identifying new approaches to budget management, who should you discuss desired
budget outcomes with?
In the business and training environment desired budget outcome should be judged with finance
and resource managers in turn proper evaluation can be done. Budget analyst in the company can
as well be contacted for the mentioned purpose.
Q4 What approaches or possible options can you investigate further to control and improve the
management of expenses in a business? (
For example-
1. cost can be controlled by planning strategically through applying cost accounting system.
2. Effective time management can be exerted to have ensured optimum utilization for
declining cost

3. Tracking cost through job costing method can be implemented for mentioned purpose
4. Variance analysis aids in identifying deviations.
5. Balance score card and bench marking method are as well suitable for specified course
Q5 What approaches or possible options can you investigate further to control and improve the
management of payroll expenses in a business?
For instances-
 Looking at employees listed on payroll
 Analyzing number of employee to avoid duplication
 Confirming tax with holdings, remittance and report for accuracy
 Payroll audit checklist
 Removing terminated employees from payroll
Q6 List three approaches or possible options you can investigate further to control and improve
the management of accounts payable in a business.
 Avoiding costly duplication and late payments
 Declining costs and manual efforts for matching to budget in financial statements.
 Reducing processing cost & time and recording prior and after approval to avoid cost
Q7 List three main methods businesses use to increase their profits.
 Proper declination of cost
 Appropriate estimation of pricing strategy to recover expenses
 Effective marketing & promotion activity to increase revenue
Q8 Providing recommendations for improved budget management and set new budget targets.
Assistant and general accountant of the company can be provided recommendations like proper
allocation & analysing of budget with actual in order to find cause for lacking performance
(D’Atri and et.al., 2019.0. There should be diverse sourcing of fund to decline cost & risk.
Q9 what is the impact of any changes must be considered when developing new approaches or
changes to budget management along with advantages and disadvantages
Customer service- It can benefit by providing quality performance through proper meeting of
objectives. It might negatively affect decision-making by impacting pricing factor.

Staff morale- Budget management can increase morale which can incline opportunity for
personal development. On the others side, disadvantage is danger of flexibility in overall
processing.
Q10 How should you present your recommendations for improved budget management?
 It can be presented by setting realistic expectations in meeting
 Categorizing all the expenses appropriately can help in same purpose
Q11 List three examples of the type of information you should include when presenting or
communicating about recommendations for budget management
Clear goal, benefits and drawbacks should be included with provided recommendations while
communicating.
SECTION 4
Q1 What information might you need to include when preparing a statistical or financial report
for the supervisors in a suburban hotel?
For preparing a statistical or financial report for the supervisors in Suburban hotel much
emphasis should be provided by maintaining accuracy, timelines, materiality, comparability, etc
kinds of features. It should focus on included he company's assets, liabilities, revenue, expenses
and owners equity.
 It should comprise all the expenses incurred for smooth functioning of organization.
 Proper estimation & involvement of earning sources so that accurate and reliable income
can be identified.
 There should be involvement of assets so that proper optimization of resources and
hotel's short term ability to overcome obligation can be identified.
 Liabilities like loan, account payable, etc can be helpful for supervision performance of
mentioned hotel.
 Owners equity like retained earning, share capital, etc contribute in supervising
significant evaluation of liquidity position can be done.
Q2 What information might you need to include when preparing a formal statistical report for the
management team of a large events or reception centre along with example ?
Statistical report provides an objective description of numerical data through comprising trends,
identifying & evaluating alternative course of action, estimate errors, monitoring processes, etc

(Christensen and et.al., 2017). For large event there should be involvement of its activities like
production, auditing and econometrics, etc so that times of uncertainty can be derived.
For example -
 large company event can comprise all the raw data, including copies of interview
questions, data sets and statistical results. It can be helpful in decision-making in turn
proper information can be derived
 The statistical report might involve the information regarding cost so that proper
formulation of structure can be made
 The statistical report can comprise insights regarding regular & seasonal customers in
turn proper data for identifying efficiency can be derived.
 This can include availability of resource for planning of input, WIP and output resources.
Q3 How can you present reports to enable informed decision-making along with example ?
Report Explain how the features of accounting software programs can assist you to manage
budgets can be enabled by for informed decision-making by following methods
It is available on official site which presents qualitative characteristics in turn better decision
can be made by identifying all present, past and future events.
This can be enabled by referring other financial statement proving websites and contacting
professional consultant to ensure higher involvement of information related with expenses,
prevailing liabilities, liquidity postilion, revenue generating capacity, etc.
There are other published platform as well which gives details of competitive advantages,
lacking areas, available resources, etc to understand profitability & inefficiency in turn better
decision can be exerted.
Q4 How do you know when to complete reports?
From the financial perspective it can be identified that it can be interpreted that
competition of report can be done to meet the deadlines provided by accounting period. There
are several rules which are required to be accomplished in order to comply with legal
requirements (Jha, 2019). In accounting period of 12 months it is important to offer published
information in turn users can make appropriate decision. On the basis of it can be identified that
to meet deadlines for formulation of financial statement to offer significant data in turn sound
decision can be exerted. It is completed at the end of every quarter or fiscal year to maintain
proper significant trustworthiness & credibility among users.

Q5 Explain how the features of accounting software programs can assist you to manage budgets.
There are several features which can be obtained from accounting software to manage budget.
It involves tracking inventory, sales, having automated invoicing, data entry, analytics, reporting,
account payable, etc. this can be helpful in managing budget by identifying lacking areas which
are required to be eliminated for boosting strengthening part of company.

SITXFIN003 – Manage finances within a budget
CASE STUDY C
TASK 1
Read the Budget
Jackson Hotel operational budget – June quarter
April May June June quarter
$ $ $ $
Revenue
Food sales 116,800 127,750 120,450 365,000
Beverage sales 240,000 247,500 262,500 750,000
Tab commission 49,300 47,850 47,850 145,000
Total revenue 406,100 423,100 430,800 1,260,000
Cost of sales
Food purchases 48,180 49,640 48,180 146,000
Beverage purchases 84,000 86,625 91,875 262,500
Total cost of sales 132,180 136,265 140,055 408,500
Gross profit 273,920 286,835 290,745 851,500
Expenses
Accounting 2,700 3,000 4,300 10,000
Advertising/promotions 3,900 4,810 4,290 13,000
Bank charges 7,582 7,359 7,359 22,300
Cleaning contractor 7,451 7,451 7,451 22,354
Commission credit card 767 767 767 2,300
Small equipment replacement 833 833 833 2,500
Insurance 1,833 1,833 1,833 5,500
Laundry 347 357 347 1,050
Legal fees 1,280 360 360 2,000
Licence fees & permits 983 983 983 2,950
Motor vehicle expenses 500 500 500 1,500
Maintenance 4,224 4,352 4,224 12,800
Printing & stationery 800 800 800 2,400
Rubbish removal 500 500 500 1,500

Communication 2,000 2,000 2,000 6,000
Training & development 1,190 1,155 1,155 3,500
Wages &on-costs 193,050 198,900 193,050 585,000
Utilities 12,000 11,647 11,647 35,295
Total expenses 241,941 247,608 242,400 731,449
NET PROFIT 31,979 39,227 48,345 120,051
Q1 list the hotel’s financial commitments under their correct cost category. Name at least two
commitments for each category
Variable direct costs: Utilities and wages and on costs
Variable indirect costs: advertising and Licence fees & permits
Fixed indirect costs: Small equipment replacement and insurance
Q2 The four categories of cost in which most fund has been allocated by the hotel along with
June quarter amount
Wages and on cost= 585,000
Utilities= 35,295
Cleaning contractor= 22,354
Bank charges= 22,300
Q3 Why have significant funds been allocated to these categories? Discuss their importance to
the business and consequences if inadequate funds are allocated.
The particular organization has given emphasis on gaining significant application of activities in
turn fulfilling objectives can become possible. The main reason behind allocating significant
level of funds to this category is to meet requirement of smooth functioning. It comprises wages,
utilities, cleaning contract and bank charges. It focuses on providing much emphasis on this due
to larger requirement of workers to proceed activities, utilities for functioning of machinery,
bank charges with accurate & fair payments and collections, etc.
The main consequences which might influence functioning of organization is lack of effective
functioning due to more expense on wages, cleaning, etc. There is no importance has been given
to other factors. It should focus on incurring expenses which involves advertising and
promotional activities to increase profitability & sustainability.

Q4 Using the Bistro departmental budget – April. You are holding a team meeting to discuss the
financial targets provided in the organisational and April bistro budgets. What information
do you need to communicate to the team to ensure they understand the targets and goals to
be achieved?
The financial targets are important for the organization to give emphasis on having significant
knowledge regarding the prevailing circumstances in turn suitable course of action can be taken.
In the April budget of the organization it has been established that total revenue is required to be
higher than estimated expenses so that proper profitability can be derived. Communicating
results can be helpful in achieving objectives (Dai and et.al., 2021). In the meeting it is
important to articulate that budget will incur expenses on licence fees, advertising, wages, etc.
which will be larger useful in carrying forward expenses in turn higher profitability to be
stabilize in sector can become possible.
It is highly crucial for the enterprise to pay attention on having relevant functioning by
understanding roles and responsibilities can become possible. Team gets clarity by understanding
the targeted goals so that eliminating non crucial part to meet their responsibilities in highly
effective manner can become possible.
Q5 What techniques can you use to promote awareness of methods of controlling costs or
increasing sales so you can achieve budget targets?
There are several techniques like establishing management accounting system and reports
which comprises inventory, price optimization, job costing, budget, performance, variance
analysis, etc. These all can provide effective information regarding estimated cost so that higher
need of prevailing situation can become possible. Providing training & development can be
useful in gaining appropriate knowledge.
TASK 2: CALCULATE VARIANCES
1. Complete the comparative analysis report for the Bistro departmental budget – April by
calculating all missing dollar value and percentage variances.
2. Complete the Favourable/Unfavourable column by indicating if the budget results are
favourable (F) or unfavourable (UF) for the business.
Comparatively analysis report
Bistro departmental budget – April
lDon’t forget to round your figures up or down to the nearest whole number.

April
Favourabl
e /
Unfavoura
ble
May
Budget Actual Varianc
e
Varianc
e Budget Bud
get
$ $ $ % $ $
Revenue
Food sales 105,120 119,837 14,716.8
0 14.0% 114,975 328,
500
Beverage sales 89,250 96,390 7,140.00 91,875 262,
500
Total sales 194,370 216,226 21,857 206,850 591,
000
Cost of sales
Food purchases 40,953 45,048 42,194 124,
100
Beverage purchases 27,563 30,043 2,481 -9.0% 26,775 78,7
50
Total cost of sales 68,516 75,091 6,576 68,969 202,
850
Gross profit 125,855 141,135 12.1% 137,881 388,
150
Expenses
Advertising/
Promotions 780 624 156 20.0% 962 2,60
0
Cleaning contractor 1,490 1,490 - 0.0% 1,490 4,47
1

Small equipment
replacement 333 393 (60) 333 1,00
0
Laundry 245 232 13 5.5% 245.00 735
Maintenance 1,493 1,262 15.5% 1,493.33 4,48
0
Printing & stationery 160 195 (35) (22.0%) 160.00 480
Training & seminars 408 653 (245) (60.0%) 396 1,20
0
Wages & on-costs 85,901 98,771 (12,870) 89,345 260,
763
Utilities 3,441 3,235 206 6.0% 3,494 10,5
89
Total expenses 94,251 106,855 13.4% 97,919 285,
857
NET PROFIT 31,604 34,281 40,115 102,
293
Particulars April
Favou
rable /
Unfav
ourabl
e May
June
quarte
r
Budg
et
Actua
l
Varia
nce
Varia
nce
Budg
et
Budg
et
$ $ $ % $ $
Revenue
Food sales
10512
0
11983
7 14717
14.00
%
Favou
rable
11497
5
32850
0
Beverage sales 89250 96390 7140 8.00% Favou 91875 26250

rable 0
Total sales
19437
0
21622
6 21857 11%
Favou
rable
20685
0
59100
0
Cost of sales
Food purchases 40953 45048 4095
10.00
%
Unfav
ourabl
e 42194
12410
0
Beverage purchases 27563 30043 2481 9.00%
Unfav
ourabl
e 26775 78750
Total cost of sales 68516 75091 6576 9.60%
Unfav
ourabl
e 68969
20285
0
Gross profit
12585
5
14113
5 15280
12.10
%
favou
rable
13788
1
38815
0
Expenses
Advertising/Promotions 780 624 156
20.00
%
favou
rable 962 2600
Cleaning contractor 1490 1490 0.00%
Neutr
al 1490 4471
Small equipment replacement 333 393 -60
-
18.02
%
Unfav
ourabl
e 333 1000
Laundry 245 232 13 5.50%
Favou
rable 245 735
Maintenance 1493 1262 231
15.50
%
favou
rable
1493.
33 4480
Printing & stationery 160 195 -35
(22.0
%)
Unfav
ourabl
e 160 480
Training & seminars 408 653 -245 (60.0 Unfav 396 1200

%)
ourabl
e
Wages & on-costs 85901 98771
-
12870 -15%
Unfav
ourabl
e 89345
26076
3
Utilities 3441 3235 206 6.00%
Favou
rable 3494 10589
Total expenses 94251
10685
5
-
12604
13.40
%
Unfav
ourabl
e 97919
28585
7
NET PROFIT 31604 34281 2677 8%
Favou
rable 40115
10229
3
TASK 3
Q1 Are there any significant variances in the sales figures that you should be concerned about?
Explain what the results indicate and why you are/are not concerned about them.
There is difference in the prevailing outcome in the sales revenue which are considered to
b favourable outcome as the actual is higher than budgeted. Revenue is generated from food and
beverages sales which is having variance in percentage of 14 & 8% respectively. The firm is not
required to be considered due to continuous positive outcome.
Q2 Are there significant variances in any of the expenses categories that you think should be
investigated further? If yes, discuss which categories and why you think they need
investigation. If no, discuss why the deviations do not warrant investigation.
Yes there is significant deviation in expenses categories and require further investigation in t
categories such as Food, beverage purchases, cleaning contract, etc. the main reason to re
investigate such part is to have appropriate analysis due to inclining of cost of actual period.
Q3 Based on your responses to questions 1 and 2, what is your overall evaluation of the budget
results? Is the bistro meeting its financial targets?
From the evaluation it can be articulated that budgets prepared for Bistro indicates that there is
positive outcome due to good amount of gross profitability (Iwazaki, Inatsu and Takeuchi,

2021). The financial targets can be achieved by specified organization due to higher ability to
generate revenue by accomplishing all requirements in effective manner.
Q4 Which expense category has the most funds allocated to it? Explain why it is important you
manage costs in this category carefully.
The wage and on cost category has higher fund allocated and required higher level of concern
from the organization. The main reason behind this is to decline total cost in turn profitability as
compared to budgeted figure can be inclined to stable position in sector.
Q5 Using the results and information obtained from the April comparative report, your answers
to the previous questions and the background information.
Write a transcript of the outcomes of your report ready to deliver to the bistro staff at the next
team meeting.
The transcript should include the following information. The current status of the budget; is the
work area meeting its budget targets, is it on track to meet June quarter budget targets?
Which areas are underperforming or performing better than expected?What changes, if
any, need to be made to help the team meet next month’s budget targets?An outline of
budget targets for May. Organisational factors that contributed to the setting of these
targets.
The current status of the present budget is to favourable as it is making company able to achieve
higher profitability. It can is presenting sign of growth and development in turn overcoming
prevailing competition can become possible by organization. The lacking areas which are
needed to be focused by team is higher expenses on purchasing of foods and beverages. There
should be application of having large number of suppliers so that cost can be declined (Debiasi
and et.al., 2018). The important changes that firm need to conduct for next month target budget
is to implement proper forecasting technique so that appropriate budget to raise required level of
funds can become possible.
An outline of budget target for may by involving organizational factors
Particulars May
Budget

$
Revenue
Food sales 114975
Beverage sales 91875
Total sales 206850
Cost of sales
Food purchases 40000
Beverage purchases 25000
Total cost of sales 65000
Gross profit 141850
Expenses
Advertising/Promotions 962
Cleaning contractor 1490
Small equipment replacement 320
Laundry 245
Maintenance 1493.33
Printing & stationery 160
Training & seminars 396
Wages & on-costs 80000
Utilities 3494
Total expenses 88560
NET PROFIT 53290
From the evaluation it can be said that can make changes in wages, etc. so that proper
profitability margin can be derived. On the basis of provided information it can be specified that
organizational factors like employees, way of using resources, etc. should be taken into
consideration for have good financial health.
.

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