SITXFIN004 Prepare and monitor budgets

Student Assessment Tasks
Finance -Managing Budgets
SITXFIN003 Manage finances within a budget
SITXFIN004 Prepare and monitor budgets
Student Name:
Student Number:
Student Assessment
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CONTENTS
Assessment Overview 4
Assessment plans 5
Assessment Task Cover Sheet – Assessment Task 1 7
Assessment Task 1: Written questions 9
Assessment Task Cover Sheet – Assessment Task 2 13
Assessment Task 2: Case study 15
Assessment Task Cover Sheet – Assessment Task 3 19
Assessment Task 3: Financial and statistical calculations 21
Assessment Task Cover Sheet – Assessment Task 4 25
Assessment Task 4: Project 27
Part A 27
Part B 29
Part C 30
Part D 31
Part E 32
Part F 33
Student Assessment
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Assessment Overview
This Student Assessment Booklet includes all your tasks for assessment of the topic: Finance – Managing
Budgets which includes the two units:
 SITXFIN003 Manage finances within a budget
 SITXFIN004 Prepare and monitor budgets.
About your assessments
This unit requires that you complete 4 assessment tasks. You must complete all tasks to achieve competency
for the units in this topic.
Assessment Task About this task
Assessment Task 1: Written questions You must correctly answer all questions in this task to show
that you understand the knowledge required of this topic.
Assessment Task 2: Case study For this task you are required to answer the questions to
demonstrate your knowledge of reviewing and monitoring
financial activity against a budget and recommending
solutions to deviations.
Assessment Task 3: Financial and
Statistical Calculations
You must correctly answer all questions in this task to show
that you understand how to calculate financial and statistical
information required of this topic.
Assessment Task 4: Project For this task you are required to prepare and manage a
budget over three months and prepare financial reports.
Assessment requirements
You will be provided an assessment schedule by your trainer. This will indicate the dates assessments will be
undertaken e.g. for practical activities and/ or the dates for assessment submissions e.g. for written work.
Prior to assessment your assessor will provide you information on how to prepare. Ensure you are fully
prepared for each assessment task. The resources required for each task are indicated in each task.
If you have identified special learning needs the assessment process and/ or materials may be adjusted to
address these requirements. If you feel there is an issue that will impact your performance during an
assessment task, it is important to bring this to the attention of your assessor prior to attempting the task.
Read all assessment task information in full. Contact your assessor to clarify assessment requirements if you
are unsure about any aspect of the assessment process or task requirements.
Each assessment task includes a set of instructions that guide you on requirements. Information is also
provided on the assessment context (e.g. where it will be undertaken) and conditions (e.g. closed book).
For performance to be deemed satisfactory in an assessment task, you must satisfactorily address all the
assessment criteria. You must satisfactorily complete each assessment task to be deemed competent in this
unit.
Submitting assessments
You will be informed the process for submitting any written work and what has to be submitted. This information
will be supplied with each task. You must submit all work by the due date. Failure to do so may count as a
submission attempt.
Complete the Student declaration section of the Assessment Cover Sheet that is supplied with each
assessment task. Submit this to the assessor along with your work. Retain a copy of all work submitted for
each assessment task.
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Academic conduct
Cheating, plagiarism and unauthorised collusion in any form during assessments will result in the assessment
submission being invalidated.
Assessment feedback
You will be provided feedback on performance on completion of the task. The feedback will be provided in the
Assessment Cover Sheet and will indicate if you have satisfactorily addressed all the assessment criteria and
indicate the assessment result as S – Satisfactory or U – Unsatisfactory. Assessors will discuss your
performance in each task when providing feedback.
Assessment resubmissions
If you fail to demonstrate satisfactory performance in an assessment task you will be provided another 2
opportunities to address the assessment criteria. The assessor will arrange this with you.
Accepting the assessment result
Once the assessor has provided written and verbal feedback, you are required to complete the Accepting
assessment result section of the Assessment Cover Sheet.
Assessment appeals
You have the right to appeal the outcome of assessment decisions if you feel you have been dealt with unfairly
or have other appropriate grounds for an appeal.
Tips for submitting written work
Assessment questions, report briefs and project instructions include words that guide you on the expected level
of response. The information below is a guide on the expected level and type of response required by
questions and instructions that include the highlighted words below.
Note that the following guidance is the minimum level of response required.
List Identify information in a list format. A short response is required e.g. a list of food items
required for a menu.
Identify Similar to list. A short response is required e.g. identify 3 types of cheese.
Outline A brief response of 1 or 2 sentences is required that includes a brief overview of the main
parts/ aspects of the question subject.
Summarise A brief response of 1 or 2 sentences is required that includes a brief overview of the main
parts/ aspects of the question subject.
Describe This requires a more comprehensive response than outline or summarise. When describing
something you provide more detailed information of the question subject. You may be often
asked to describe processes or aspects/ features or qualities of the question subject.
Expected responses will be between 3 to 4 sentences in length.
Explain When explaining something you provide detailed information on the question subject. You may
be asked to explain reasons justifying why you would complete processes in a certain order or
why something happened. Expected responses will be between 3 to 4 sentences in length.
Analyse When responding to questions asking you to analyse something, you should identify key
aspects or features of the subject. Expected responses will be between 3 to 4 sentences in
length.
Quick summary of assessment process
1. Review task requirements to identify assessment criteria and task requirements.
2. Clarify anything you don’t understand with your assessor.
3. Ensure you are fully prepared to undertake the task.
Student Assessment
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4. Complete the Assessment Agreement. Provide this to your assessor prior to attempting assessment
task 1.
5. Complete the Assessment Task Cover Sheet and submit to you assessor at the commencement of a
task that is observed by your assessor or when submitting written work.
6. Undertake the task in accordance with task requirements.
7. Your assessor will provide written feedback in the Assessment Task Cover Sheet and discuss this with
you.
8. If required identify and confirm part of the task that must be resubmitted and confirm your understanding
of requirements with the assessor.
Complete the Student Declaration – Acceptance of assessment result section of the Assessment Task Cover
Sheet. Keep a copy of the feedback provided in the Assessment Task Cover Sheet.

Student Assessment
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Assessment Task 1: Written questions
TASK SUMMARY
You are to answer all written questions.
RESOURCES AND EQUIPMENT REQUIRED TO COMPLETE THIS TASK
 Access to textbooks and other learning materials.
 Access to a computer, printer, Internet and applicable software (eg Microsoft Office).
WHEN AND WHERE DO I NEED TO COMPLETE THIS TASK?
 This task may be done in your own time as homework or you may be given time to do this task in class
(where applicable).
 Your assessor will provide you with the due date for this assessment.
WHAT DO I NEED TO SUBMIT?
 Your answers to each question in this task.
INSTRUCTIONS
 This is an open book test – you can use your learning materials as reference.
 You must answer all questions in this task correctly.
 You must answer the questions by typing your answers in Microsoft Word or a similar program. Ensure the
answers are numbered to correspond with the question numbers. Your assessor will advise how to submit
this assessment task.
QUESTION
Provide an outline of what a master budget is and what it contains.
QUESTION 2
Identify the four basic financial reports and outline their purpose and content.
QUESTION 3
Provide a brief summary of the purpose of each of the following budgets:
 Cash/Cash flow budget
 Departmental budget
 Event budget
 Project budget
 Purchasing budget
 Sales budget
 Wage budget.
QUESTION 4
Identify the purpose of the following financial records:
 Bank deposit documentation
 Bank statements
 Banking summaries
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 Business Activity Statements
 Cheque books
 Credit card transaction statements
 Journal entries
 Labour and wages reports
 Merchant statements
 Merchant summaries
 Transaction reports.
QUESTION 5
What are the requirements for a tax invoice in Australia?
QUESTION 6
Research three common accounting software applications that small businesses use and summarise their
functions and features. Outline how one of these software applications could be used to assist controlling staff
costs in a restaurant.
QUESTION 7
Describe three techniques commonly used for making estimates of expense budgets.
QUESTION 8
Identify and outline the steps in the accounting cycle.
QUESTION 9
a) Give three examples of common negative changes in the internal environment of a hotel which may be
taken into account when reviewing budgets.
b) For each example provided in part 9a, recommend one course of action that may be taken to address the
negative change.
QUESTION 10
Budget formats can vary between organisations and accounting programs: list two ways a negative situation
can be indicated in figures on a budget.
QUESTION 11
Discuss the role of a budget and financial reports for a business.
QUESTION 12
Discuss how changes in legislation can impact on a budget. Give three examples of legislation changes in the
last decade that have had an impact on the hospitality industry and the profitability margins.
QUESTION 13
Discuss how a hospitality business might manage and recover their profit margin in a downturn in the economy.
QUESTION 14
Complete the table below by indicating which of the sources of data required for budget preparation are internal
and which are external.
Items Internal External
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competitor research
customer or supplier research
declared commitments in areas of operation
financial information from suppliers
financial proposals from key industry stakeholders
income and expenditure for previous time periods
departmental, event or project budgets
grant funding guidelines or limitations
management policies and procedures
organisational budget preparation guidelines
performance information from previous periods
QUESTION 15
Choose one internal and one external source of data indicated in question 14. Outline how each type of data
could be used to prepare a budget in the hospitality industry.
QUESTION 16
Identify and briefly summarise the four stages of a budget cycle.
QUESTION 17
a) Define the following options and approaches to budgeting:
 Incremental budgeting
 Zero-based budgeting.
b) Why are ‘rolling budgets’ useful in the hospitality industry?
QUESTION 18
Complete the following table to differentiate between the ‘top down’ and the ‘bottom up’ approach to negotiating
budgets.
Description Advantage/s Disadvantage/s
Top down
Bottom up
QUESTION 19
Complete the table below by indicating which of the items are included in Financial reports or Statistical reports
or both. Provide an example of the type of each item in the hospitality industry e.g. commission earnings may
be earned by the salespeople who sell the hotel room deals to companies.
Items Financial
Reports
Statistical
Reports Example
Commission
earnings
Covers and financial
returns
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Daily, weekly,
monthly transactions
Occupancy rates
and financial return
Sales returns
Staff costs
Yield
Sales performance
QUESTION 20
Food wastage is an unknown cost in Australia. One thing for sure that we know is that the cost is escalating
quickly. Explain what a restaurant might calculate or consider in relation to waste when preparing financial and
statistical reports. Give three examples.
QUESTION 21
Explain what yield management is in relation to a hotel. Why is yield management important?
QUESTION 22
Forecasted room revenue calculations are based on the number of rooms available, the number of operating
days, the average room rate and the forecasted occupancy. Calculate the room revenue (to the nearest dollar)
using the data in the table below.
Number of rooms
available
Forecast
occupancy
Average Room
Rate
Operating Days
p/year
Forecasted room
revenue (sales)
Example: 122 75% $105 365 $3,506,737
50 62% $90 310
15 98% $86 365
300 89% $220 365
QUESTION 23
Working out how much to charge for food and drink.
a) Calculate the cost of a drink of vodka and soda (before taxes):
 You will need the following to make one drink – 0.03L of vodka, 0.1L of soda, 0.02 kg of lime and one
straw.
 A litre of vodka costs $12.00, a litre of soda water costs $1.00, a pack of 140 straws costs $3.00 and
1kg of limes is $2.00. If 0.03L of vodka costs $0.36 work out the cost of the soda water, slice of lime
and one straw.
Student Assessment
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 What is the cost of the drink (ingredients only)?
 If you wanted to make 500% on the drink how much would it be?
c) What other costs may you have to calculate into the cost of this drink? List three suggestions.
d) If half of the bag of limes were thrown out after being cut and not used, what is the cost of the waste?
QUESTION 24
What are the three different ways that a statistical/financial report can show variances?
QUESTION 25
What are the four main reasons budget deviations occur? What factors do you need to consider when deciding
whether or not a budget deviation should be investigated further?
What do I need to hand in for this task? Have I completed this?
Answers to all questions 

Student Assessment
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Assessment Task 2: Case study
TASK SUMMARY
For this task you are required to answer the questions to demonstrate your knowledge of:
 Reviewing and monitoring financial activity against a budget and recommending solutions to deviations.
RESOURCES AND EQUIPMENT REQUIRED TO COMPLETE THIS TASK
 Access to textbooks and other learning materials.
 Access to a computer, printer, spreadsheet and word processing software.
WHEN AND WHERE SHOULD THE TASK BE COMPLETED?
 This task may be done in your own time as homework or you may be given time to do this task in class
(where applicable).
 Your assessor will provide you with the due date for this assessment.
WHAT NEEDS TO BE SUBMITTED?
 Your answers to all questions.
INSTRUCTIONS
Read the case study below and answer all questions correctly.
Budget review
You are an Operations Manager with Marino Enterprises and oversee the operations for six of the venues.
John Marino has asked you to monitor and review specific budget figures for two businesses as presented
below and present an analysis of their meaning for the organisation.
The management team are keen to identify issues that need to be addressed based on an analysis and
review of the budget data in order to optimise the viability of the business while retaining market share,
market position and their high product and service standards.
You have been presented with the following information:
Property 1
Selected budget data
Item Projected/Budgeted figure Actual figure
Room Sales 20,000,000 12,000,000
Food sales 5,000,000 9,000,000
Liquor sales 3,000,000 5,000,000
Wages 2,100,000 2,500,000
Rent 1,000,000 1,200,000
Overheads 500,000 450,000
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Property 2
Six month’s total sales figures
Month $ Budget $ Actual
July 50,000 49,300
August 54,000 56,970
September 58,000 66,160
October 62,000 65,500
November 66,000 67,570
December 70,000 69,040
QUESTION 1
Use a spreadsheet program to calculate and facilitate the development of final figures for Property 1 as follows:
 Calculate the dollar deviations for room sales, food sales, liquor sales, wages, rent and overheads.
 Calculate the percentage deviations for room sales, food sales, liquor sales, wages, rent and overheads.
 Indicate if the identified deviations are positive or negative.
QUESTION 2
Use a spreadsheet program to calculate and facilitate the development of final figures for Property 2 as follows:
 Total the budgeted and actual sales for the 6 months.
 Calculate the dollar deviations for sales on a month-by-month basis.
 Calculate the percentage deviations for sales on a month-by-month basis.
 Calculate year-to-date budgeted totals for sales on a month-by-month basis.
 Calculate year-to-date actual totals for sales on a month-by-month basis.
 Calculate the dollar deviations for YTD figures on a month-by-month basis.
 Calculate the percentage deviations for YTD figures on a month-by-month basis.
QUESTION 3
For Property 1 suggest four possible causes for the variation in room sales.
QUESTION 4
For Property 1 suggest four possible ways to manage the variation in room sales.
QUESTION 5
Identify four possible causes of the results for food sales in Property 1.
QUESTION 6
There is no need for you to investigate the ‘wages’ deviance: why might this be so?
QUESTION 7
In late June Property 1 undertook a major advertising campaign that had been factored into budgets for July:
given the actual results for July, what action might you suggest to management?
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QUESTION 8
Why would you want to conduct a major investigation into sales for September?
QUESTION 9
The organisation has found out that other businesses in the chain had shown a 6% positive variation in actual
sales against budgeted revenue figures: list three suggestions on what might you do about this?
QUESTION 10
How might you research internal factors impacting the figures you have been given? Give three suggestions.
QUESTION 11
What could you do to research external factors impacting the figures you have been given? Give five
suggestions.
QUESTION 12
Identify one reason for using each of the following types of financial records when managing finances in a
restaurant. (Provide a different reason for each type of document).
a) banking summaries –
b) cheque books –
c) credit card transaction statements –
d) Invoices –
e) labour and wages reports –
f) merchant statements –
g) transaction reports –
.
QUESTION 13
Which colleagues and managers might you need to share these findings with? Give five suggestions.
QUESTION 14
You briefly consider reducing staff numbers as a way of improving profit but reject the idea: what reasons might
be behind this thinking?
What do I need to hand in for this task? Have I completed this?
Answers to all questions 

Student Assessment
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Assessment Task 3: Financial and statistical calculations
TASK SUMMARY
You are to answer all written questions.
RESOURCES AND EQUIPMENT REQUIRED TO COMPLETE THIS TASK
 Access to textbooks and other learning materials.
 Access to a computer, printer, Internet and word processing software (eg Microsoft Word).
 Calculator or spreadsheet application.
WHEN AND WHERE DO I NEED TO COMPLETE THIS TASK?
 This task may be done in your own time as homework or you may be given time to do this task in class
(where applicable).
 Your assessor will provide you with the due date for this assessment.
WHAT DO I NEED TO SUBMIT?
 Your answers to each question in this task.
INSTRUCTIONS
 This is an open book test – you can use your learning materials as reference.
 You must answer all questions in this task correctly.
 You must answer the questions by typing your answers in Microsoft Word or a similar program. Ensure the
answers are numbered to correspond with the question numbers. Your assessor will advise how to submit
this assessment task.
QUESTION 1
Calculate Cost of Goods sold for a bar given the following information:
 Opening stock for the bar: $30,000
 Closing stock for the bar: $25,000
 Requisitions to the bar: $125,000
QUESTION 2
What is the Percentage Cost Factor for the following?
 Cost of Goods Sold: $17,800
 Revenue: $41,786.
QUESTION 3
What is the Gross Profit for the following?
 Cost of Goods Sold: $55,962
 Revenue: $134,000
QUESTION 4
Calculate Percentage Mark-Up for the following:
 Revenue: $15,000
 Cost of Goods Sold: $6,934
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QUESTION 5
What is the Return on Proprietor’s Funds given the following?
 Owner’s funds: $1,200,000
 Nett profit: $365,500
QUESTION 6
Calculate Current Asset Turnover Ratio (expressed as a percentage) from the following:
 Average current assets: $2,000,000
 Sales: $350,680
QUESTION 7
What is the Gearing Ratio based on the figures below (expressed as a percentage)?
 Average liabilities: $450,999
 Average equities: $2,150,000
QUESTION 8
Calculate the Working Capital Ratio for the following:
 Current assets: $805,000
 Current liabilities: $1,450,000
QUESTION 9
What is the Quick Asset Ratio (expressed as a formula) for the following figures?
 Current assets: $2,000,000
 Stock: $55,000
 Current liabilities: $1,300,000
 Bank overdraft: $45,000
QUESTION 10
What is the Proprietary Ratio (expressed as a percentage) given the following?
 Total proprietorship: $375,000
 Total assets: $1,500,000
QUESTION 11
Calculate the gross profit margin percentage for the figures below:
 Sales: $ 2,457,983
 Gross profit: $890,816
QUESTION 12
Calculate room occupancy percentage from the following:
 Total rooms available: 1205
 Rooms occupied: 378
QUESTION 13
What is the average room rate for the following?
 Room revenue: $66,450
 Total rooms available: 524
Student Assessment
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QUESTION 14
The following ratios are used to judge the financial stability of a business: identify if the following are used to
determine the short- or long-term financial stability of a business.
Name of ratio Short-term or Long-term
Quick asset ratio
Proprietary ratio
Working capital ratio
Interest coverage
QUESTION 15
If your working capital ratio went from 2 to 1, would that generally be seen as a positive or negative movement?
QUESTION 16
Your gearing ratio has moved from 0.5 to 1.0: is that generally regarded as a Positive or Negative movement?
QUESTION 17
Your analysis of labour costs indicates negative deviations: what might you suggest to improve this situation?
QUESTION 18
You work in a bar. Your analysis of labour costs indicates a 50% overspend from budgeted costs for the month.
Outline what actions you could implement, including stakeholder communications.
QUESTION 19
You work in a restaurant. Your analysis of sales indicates a 10% shortfall on projected sales for the month.
Outline what actions you could implement, including stakeholder communications.
What do I need to hand in for this task? Have I completed this?
Answers to all questions 
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Assessment Task 4: Project
TASK SUMMARY
For this task you are required to prepare and manage a budget over three months and prepare financial reports.
RESOURCES AND EQUIPMENT REQUIRED TO COMPLETE THIS TASK
 Access to textbooks and other learning materials.
 Access to an accounting software package (your assessor will provide information for access to free
software).
WHEN AND WHERE SHOULD THE TASK BE COMPLETED?
 This task may be done in your own time as homework or you may be given time to do this task in class
(where applicable).
 Your assessor will provide you with the due date for this assessment.
WHAT NEEDS TO BE SUBMITTED?
 Part A – Email and draft budget for B&B managers’ discussion.
 Part A – Memo and draft budget for discussion and approval from Betsy.
 Part B – Memo and final budget.
 Part C – Memo.
 Part D – Email communication with supplier.
 Part D – Memo to Betsy.
 Part E – Cash flow report and memo.
 Part F – Memo screenshots
INSTRUCTIONS
PART A
You are the manager of a small bed and breakfast owned by Marino Enterprises. Comfy Inn is located in
country Victoria and was purchased by the company two years ago when the long term owners decided to
sell. The B&B was sentimental to John Marino and Betsy Smith as they used to stay there in their younger
days. When it came onto the market they snapped it up.
Some background on the B&B – they are a small luxury homestay property that offers seclusion, privacy and
romance for an adult’s only stay. There are three cabins onsite; each fully contained. They provide a full
breakfast in the main house and a full bar that is open for drinks and canapés from 4pm – 6pm on Friday,
Saturday and Sunday afternoons. The bar is open at other times for snacks, coffee, tea, smoothies, soft
drinks and alcohol purchases.
Marino Enterprises looks after the property grounds and the manager’s wage. Everything else is the
responsibility of the manager who resides onsite in the main house. Your partner is employed as the short
order cook and you pay a casual cleaner. As part of the onsite manager’s role, you and your partner
complete the general housekeeping duties when it is quiet.
It is budget preparation time and Betsy has asked you to meet with her to discuss the details.
Betsy has provided you with last year’s actual revenue received, broken down into accommodation, food and
beverages.
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REVENUE BUDGET – ACTUAL for 2015-2016
Comfy Inn B&B
LAST YEAR
Accommodation Food Beverages TOTAL
July 3,000 1,600 1,560 6,160
August 2,800 1,800 1,600 6,200
September 2,800 1,800 1,900 6,500
October 3,600 2,400 1,800 7,800
November 3,800 3,000 1,960 8,760
December 6,000 3,800 1,700 11,500
January 8,800 3,800 1,600 14,200
February 8,800 4,000 1,600 14,400
March 3,800 3,400 1,400 8,600
April 3,600 2,600 1,200 7,400
May 3,400 2,400 1,400 7,200
June 3,200 1,800 1,500 6,500
TOTAL $53,600 $32,400 $19,220 $105,220
1. You will now meet with Betsy (role played by your assessor). She will provide you with the instructions for
preparing your budget and allocating costs.
You will be required to actively participate in the meeting and take notes on the detail provided (by your
assessor in the role of Betsy). Have this assessment work sheet with you to record the details and be
prepared to ask questions to clarify the information provided.
Your assessor will give you details on when this meeting will be held.
In the meeting, you will need to confirm (take notes as required) the following:
a) What budget you are responsible for.
b) The increases Betsy has directed you to include into the projected income budget for the next year.
 Accommodation
 Food prices
 Beverage prices.
c) Betsy will also give you some extra considerations during your meeting. Make note of them:
2. Betsy has also provided you with the following expenditure information that you will need to consider when
preparing your cash flow budget. This data has been sourced from historical data, committed costs for the
B&B and Marino Enterprises policy:
 Marino Enterprises’ overheads are $2000. All individual businesses and departments pay this overhead
in August of each year.
 Lease payments are $1,500 monthly.
 Combined insurance coverage to increase to $1,400 per year paid in two equal payments in March and
September.
 General repairs and maintenance to the property of $4,800 pa to be budgeted monthly.
 Digital marketing and advertising costs will be $2,400 pa, payable monthly.
 Charges for out-sourced laundering is $800 per month.
 Electricity charges are payable every quarter as follows:
 September: $2,200
 December: $2,000
 March: $2,400
 June: $3,000.
 General monthly miscellaneous expenses amount to $600/month.
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You also know from your experience and the management of the property that:
 You need to replace some linen and towels at the cost of $2000 and replace kitchenware consumables
to the value of $1000 at some point in the year. You will need to decide when it is best to include this
expenditure in your budget along with an explanation to Betsy as to why you think it is best budgeted for
in those months.
 The monthly cost of F&B stock is predicted to run at 40% of the food and beverage sales. You will need
to calculate this cost into your projections.
 The cost of labour is calculated at 25% of all monthly sales. You will need to calculate this cost into your
projections.
3. Betsy has asked you to enter the income and expenditure data she has given you plus your projections into
your accounting system to prepare the draft revenue budget for the upcoming year. You may use an
accounting software package or alternatively you could use a Microsoft Excel (or similar software)
spreadsheet. If you use spreadsheet software make sure you use the headings: income, cost of sales,
gross profit, expenses and operating profit. Enter the data with 0 decimal places.
a) Prepare an email that you can send to the other managers at the B&B, and John Marino seeking their
input and feedback. Attach your draft budget and ensure that you provide them with enough information
so that they can make a judgement of how and why you have allocated funds as you have. Submit this
email to your assessor as if they were one of the managers.
d) Print a copy of your draft budget and submit it to your assessor (in the role of Betsy) along with a memo
explaining:
 the extra expenditure for discussion and approval (beds and kitchen appliances)
 a discussion on the internal and external factors that could have an impact on the budget. Discuss
at least three internal and three external factors.
What do I need to hand in for Part A of this
task?
Have I completed this?
Email and draft budget for B&B managers’
discussion 
Memo and draft budget for discussion and
approval from Betsy 
PART B
Betsy has come back to you with some changes to be made to the draft budget. These changes will have
come via email or feedback on your hard copy draft.
Betsy also thinks that you have over calculated the cost of stock and the wages at 25% is too high. She has
asked you to consider options for reducing the cost of both without effecting customer service levels, the
quality of product and of course the income.
She has also asked you to have the final draft of the budget back to her within the week.
1. Provide at least three recommendations for changes to the budget that will satisfy Betsy’s requests in a
memo. It is your responsibility to meet the budget so you can choose to make recommendations to increase
income, decrease expenditure wherever you see fit or even negotiate not to make any changes to the
expenditure.
Make the changes to your budget in the accounting software. Produce a final budget report and submit it to
your assessor along with a memo outlining the changes you have (or have not) made with an explanation
justifying your decisions. In your justifications include the advantages and disadvantages of accepting your
changes. Submit your memo and report to your assessor by the due date.
What do I need to hand in for Part B of this task? Have I completed this?
23 | P a g e F i n a n c e – M a n a g i n g B u d g e t s S A B V 1 1 9
Memo and final budget 
PART C
Betsy has approved your budget and you need to sit down with the short order cook to discuss the budget as
they do all of the ordering and are responsible for meeting the food and beverage budget requirements.
Assume that one of your recommendations to Betsy was to drop the cost of food purchases without dropping
the quality. The short order cook is not happy with this decision and you need to collaborate with them to
come up with the alternative options.
The B&B is known for its exquisite breakfasts and currently, all food is sourced locally from individual
suppliers, and where possible, organic produce. Everything is made from scratch and most items of the
menu are made with fresh ingredients. The menu is as follows:
 Homemade bircher muesli with seasonal fruit compote and activated nuts.
 Baked french toast with fresh seasonal fruit and blackberry compote.
 Buttermilk pancakes with orange cardamom syrup.
 Three egg omelette with your choice of fillings – chorizo, bacon, mushrooms, spinach, feta, goat cheese,
brie, blue cheese, vintage cheddar and tomatoes.
 Pumpkin and spinach quiche with rocket breakfast salad.
 Eggs benedict with your choice of ham, smoked salmon, mushrooms or bacon.
 Corn and zucchini fritters with a delectable potato rosti and breakfast salad and salsa.
 The world’s best chicken and champagne breakfast.
 The big breakfast with steak, pork and fennel sausages, bacon, tomatoes, mushrooms, spinach, potato
rosti and toast.
 Avocado smash with feta and oven roasted capsicum on your choice of four different breads.
 Good ole’ bacon and eggs on your choice of bread.
You believe that there are several ways to reduce the costs.
1. Work with one other student in the roles of manager and short order cook to discuss the final budget,
explain what their role is in terms of financial management (to stay within the budget, save money where
possible) and together come up with a list of at least four recommendations to reduce the costs.
2. Write a memo to your assessor with your recommendations for reducing the cost of the menu. You will need
to make sure that your recommendations do not have an impact on the level of customer service and the
B&Bs reputation for exquisite breakfasts.
What do I need to hand in for Part C of this task? Have I completed this?
Memo 
24 | P a g e F i n a n c e – M a n a g i n g B u d g e t s S A B V 1 1 9
PART D
It is September and the budget is as follows:
July
Budget
July
Actuals
August
Budget
August
Actuals
INCOME
Accommodation 3150 5020 2940 3670
Food 1680 1820 1890 2040
Beverages 1638 1680 1680 1896
TOTAL REVENUE 6468 8520 6510 7606
EXPENSES
Overhead
Stock 1,327 2,100 1,428 2,300
Lease 1,500 1,500 1,500 1,500
Repairs/maintenance 400 600 400 300
Advertising 200 200 200 200
Laundry 800 1,000 800 950
Wages 1,617 1,532 1,628 1,450
Miscellaneous 600 560 600 400
TOTAL EXPEND. 6,444 7,492 6,556 7,100
+/- 24 1,028 -46 506
Cash on hand: start 10,000 10,000 10,024 11,028
Cash on hand: end 10,024 11,028 9,978 11,534
You as the manager and the small order cook have agreed to speak to your fruit and vegetable supplier to
see if there are any possibilities of reducing the cost of your purchases. You want to reduce your delivery
from 4 days per week to twice a week and rather than telling them what fruit and vegetables you want, you
are requesting them to select the best quality for the cheapest price, ie the cheapest on the day.
Also as part of cost savings you have had to make the decision to move away from local suppliers of shelf
items such as porridge, flour, herbs and spices, sugar, etc. Now that Costco has opened you have the option
of buying in bulk. You have calculated that this will save you approximately $3,000 – $4,000 per year.
3. Using the organisations accounting software system or excel, enter the above budget income and
expenditure amounts for July and August to produce a suitable report.
4. Draft the communication with the supplier outlining your request and ask them to provide you with the best
possible pricing structure. You will also need to influence their decision by reminding them that the B&B
wants to stay with local producers and their quality is the best. Your communication should be formatted
professionally and written clearly and in a suitable language for the audience. Submit this communication to
your assessor.
As the manager you have been trying to cut costs in wages by doing the housekeeping yourself during the
week and on Saturdays. While you have made savings you have run yourself into the ground and are
exhausted. It has also meant that customer service has suffered because you are running from the office to
the cabins during the two to three hour cleaning window while customers wait. Sales have been up with
accommodation running at 92% occupancy over the past four months. You want to bring the casual
housekeeper back in for 7 days per week. This will add approx. $4000 to your monthly expenditure.
5. Draft a communication to Betsy regarding your evaluation of the budget – how you are feeling, how in your
effort to reduce expenditure, this has caused a slump in customer service, your recommendations for
changes to the budget and the impact that the changes will have – positive and negative. You will need to
influence Betsy so ensure you demonstrate that your month-to-date actuals are ahead of budget and how
you are saving money. Include your report in your communication to Betsy.
25 | P a g e F i n a n c e – M a n a g i n g B u d g e t s S A B V 1 1 9
What do I need to hand in for Part D of this task? Have I completed this?
Email communication with supplier 
Memo to Betsy 
PART E
It’s the beginning of November and the following income and expenses are for October.
Invoices received:
Patches Fruit and Veg $522
Dan Murphy’s $160
Laman’s Meats $340
Olsen Laundry $400
Receipts:
Costco $178
Credit Card Payments (guests):
C. James $590
– Accom 300
– Food 230
– Bev 60
F. Dunkertin $1140
– Accom 600
– Food 420
– Bev 120
M. Tan $792
– Accom 450
– Food 286
– Bev 56
J. Kelly $1074
– Accom 300
– Food 410
– Bev 364
L. Keen $760
– Accom 450
– Food 310
– Bev 0
B. Smith $214
– Food 214
The last two months have seen some changes. There was a major hail storm in the area which caused
damage to one of the cabins. The storm caused a lot of damage and the cabin has been uninhabitable for 5
weeks across September and October. The occupancy rate has dropped to 69%. The insurance company is
paying for the majority of the damage but $5,000 will need to be paid out of pocket.
26 | P a g e F i n a n c e – M a n a g i n g B u d g e t s S A B V 1 1 9
6. Use the information above (and organisations accounting software system or excel) to update the budget in
the blank cells.
September
Budget
September
Actuals
October
Budget
October
Actuals
INCOME
Accommodation 2,940 2,028 3,780
Food 1,890 1,228 2,520
Beverages 1,995 1,296 1,890
TOTAL REVENUE 6,825 4,552 8,190
EXPENSES
Overhead 0 0 0 0
Stock 1,554 1,180 1,764
Lease 1,500 1,500 1,500 1,500
Insurance 700 700 0 0
Repairs/maintenance 400 380 400
Advertising 200 200 200 200
Electricity 2,200 2,200 0 0
Laundry 800 500 800
Wages 1,706 3,300 2,048 2,800
Miscellaneous 600 290 600 700
TOTAL EXPEND. 9,660 10,250 7,312
+/- -2,835 -5,698 878
Cash on hand: start 9,978 11,534 7,143
Cash on hand: end 7,143 5,836 8,021
1. Create a report outlining the cash flow and submit it to your assessor with an explanation of how you might
recover from the deficit this month. Make at least two recommendations for cash recovery in
September/October.
What do I need to hand in for Part E of this task? Have I completed this?
Cash flow report and memo 
PART F
It is the end of December and the actual cash amount is down 53% on the original projection. A large
contributing factor is that income targets have not been met and the food and beverage budgets have been
over spent by 20%. Betsy has asked you to come up with recommendations to solve the income problem,
forecast for the remaining six months of the financial year and communicate the new targets and the
importance of meeting budgets to the cook.
The good news is that you have heard through the grapevine that there are a number of events happening in
the region in the last half of the year. These are weekday tourism events and there are a number of big
construction projects where employees drive-in and drive-out for shifts Monday to Friday.
7. What sources of information might you need to set realistic projections for the rest of the year, including
finding out more information about what is coming up in the region? Make a list of at least four people or
places you could seek information from. Undertake internet research and identify at least four people or
organisations you could seek information from. Take a screenshot of each source of information accessed
and submit this to your assessor.
27 | P a g e F i n a n c e – M a n a g i n g B u d g e t s S A B V 1 1 9
2. Identify at least three solutions for the income slump. The solutions should concentrate on increasing
income and revenue rather than on reducing expenses.
3. Write a memo or email to Betsy and the Cook at the B&B outlining the answers to the above questions and
including a discussion aimed at the cook about the importance of meeting budget restrictions, what the cook
should do if they are having trouble meeting the budget or find it challenging keeping relationships with
suppliers. Submit your memo to your assessor in the role of Betsy.
What do I need to hand in for Part F of this task? Have I completed this?
Screenshots of sources of information accessed 
Memo 


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