Reference no: EM132549279
SITXFIN003 Manage finances within a budget - Royal Gurkhas Institute of Technology
Assessment task 1: Case Study
Required documents and equipment:
- Computer with internet connection to refer to various resources.
- Student assessment booklet and a pen (organized by the student).
- RGIT Learners' resources for the unit SITXFIN003 - Manage finances within a budget (organised by the trainer).
- Learner's notes
Instructions for students:
• Complete Tasks 1 and 2 in Assessment AT3.
• Read the scenarios and answer the questions.
• Round all dollar values to the nearest whole number when calculating financial information; for example, $12.55 becomes $13, $18.22 becomes $18.
• Unless stated otherwise, round all percentages to one decimal point when calculating financial information; for example, 12.55% becomes $12.6%, 18.22% becomes 18.2%.
All budget calculations can be completed manually or using accounting software or computerbased spreadsheet software, such as Microsoft Excel or Google Sheets.
This assessment will be conducted in the RGIT classroom or outside the campus with access to the resources listed above.
You must satisfactorily perform all tasks to be deemed satisfactory.
Case study
The Jackson hotel has a bistro (JJs), two bars (public and sports), a drive-through and walk-in bottle shop and TAB situated beside the sports bar.
Q1: List the hotel's financial commitments under their correct cost category. Name at least two commitments for each category
•Variable direct costs
•Variable indirect costs
•Fixed indirect costs
Q2: Name the top four cost categories the business has allocated the most funds to in this budget period.
Q3: Why have significant funds been allocated to these categories?
Discuss their importance to the business and consequences if inadequate funds are allocated.
Q4:
Using the same Appendix 1 go to 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?
Q5: What techniques can you use to promote awareness of methods of controlling costs or increasing sales so you can achieve budget targets?
Task 2: Calculate variances
• Go to Appendix 1.
•Complete the comparative analysis report for the Bistro departmental budget - April by calculating all missing dollar value and percentage variances.
•Complete the Favourable/Unfavourable column by indicating if the budget results are favourable (F) or unfavourable (UF) for the business.
• Submit the budget to your assessor once completed.
Task 3: Question and answer
• Answer all questions based on the budget outcomes in the completed April budget comparative report in Task 2 and case study information.
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.
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.
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?
Q4: Which expense category has the most funds allocated to it? Explain why it is important you manage costs in this category carefully.
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.
Assessment task 2: Case Study
Required documents and equipment:
- Computer with internet connection to refer to various resources.
- Student assessment booklet and a pen (organized by the student).
- RGIT Learners' resources for the unit SITXFIN003 - Manage finances within a budget (organised by the trainer).
- Learner's notes
Task 1: Interpret budget results
• Go to Appendix 2.
•Evaluate the budget outcomes and their impact on the operation and financial goals of the
bistro .
•Answer all questions based on the outcomes in the comparative analysis report, Bistro
purchasing budget - May and the case study information.
Q1: Discuss how the outcomes food and beverage sales and costs of sales indicated in the May comparative analysis report impact the bistro area and the business overall. Consider the types of deviation (positive or negative) and size of the deviations in food, beverage and total sales and cost of sales categories.
Q2: What are two possible explanations for the deviations in food costs and beverage costs? Consider information provided in the May purchasing budget as well as the comparative report and case study information.
Q3: When preparing the budgets, the hotel forecasted food costs as 37% of food sales and beverage costs as 30% of beverage sales.
Is the bistro meeting organisational goals for cost of sales? What is the difference between the budget target and actual results?
•Food purchases
•Beverage purchases
Q4: Should these deviations be reported to management? Explain why/why not.
Q5: Based on the May purchasing budget, in what categories are the largest food and beverage cost deviations occurring?
Task 2: Investigate option to improve performance
The food and beverage manager is very concerned about the food and beverage purchasing and cost of sales results. They want the bistro team to make it a priority to meet budgeted targets for cost of sales in June. Management then plan to reduce budget allocations for food and beverage purchases in the September quarter budget. It is an organisational goal to reduce cost of sales to below the current percentages of 37% food cost and 30% beverage cost. To meet June and September quarter budget targets, new methods of managing costs must be investigated.
• Go to Appendix 2.
•Answer all questions based on the outcomes in the comparative analysis report Bistro
departmental budget - May, Bistro purchasing budget - May and case study information.
Q1: List six options for managing costs that could be applied to this situation and for each, explain the pros and cons including the impact on customer service levels. Finally, provide your recommendations of which options JJs should implement.
Q2: You have decided to source new you would investigate if changing suppliers is a viable option for reducing your cost of sales. How will you obtain information to determine if prices and product quality from alternate suppliers are appropriate for your operation? fruit and vegetable and seafood suppliers. Describe how
Q3: You need to investigate which current suppliers have increased prices for products and services, how much prices have risen and how much of the business's financial resources are allocated to existing suppliers.
What organisational financial documentation will provide this information?
Q4: Your research has revealed that a number of other suppliers can supply similar quality items at cheaper prices than your current supplier. Describe what you would discuss with your current supplier before making a decision.
Q5: Who would you consult with before implementing any changes to the hotel's suppliers of fruits and vegetable and seafood products?
Task 3: Improve budget performance
• Go to Appendix 2.
• Read and interpret the information and outcomes contained in the Bistro labour budget - June quarter.
• Evaluate their impact on the operational and financial goals of the bistro.
• Answer all questions based on the labour comparative analysis report, staffing and case study information.
Q1: Complete the table below by inserting the variance percentage for each category in each month.
Q2: What do these statistics tell you about the bistro's performance for the June quarter? Explain what the variances mean and how this affects the department's ability to meet its financial goals.
Q3: Management think one reason for high bistro labour costs is the department is consistently overstaffed; more staff than necessary are rostered on for most service periods. Rosters have been reviewed and new staffing levels suggested for front of house and kitchen areas. The number of customers served and sales revenue is expected to remain relatively stable in the near future.
Review the bistro's current and revised staffing levels in Bistro staffing levels table in Appendix 2.
Discuss the impact these changes could have on customer service levels, your team and budget targets. Consider both positive and negative outcomes.
Q4: What payroll documentation can you use to maintain detailed records and monitor funds allocated to labour costs during the budget period?
Q5: During the initial investigation phase, with whom would you discuss the reasons for changes to rosters and the desired outcomes of the changes?
Q6: You believe the changes will have a negative impact on customer service standards and food quality, leading to an increase in customer complaints. This could lead to lower customer numbers and sales revenue over the next year.
You want to present your concerns to management and recommend smaller cuts to staffing levels, especially to the front of house team during the busiest periods. Your suggestions include better management of hours worked by casual staff and a review of service procedures to streamline work practices.
Prepare a transcript of your recommendations to be presented to management at the next management meeting.
Assessment task 5: Case Study
Required documents and equipment:
- Computer with internet connection to refer to various resources.
- Student assessment booklet and a pen (organized by the student).
- RGIT Learners' resources for the unit SITXFIN003 - Manage finances within a budget (organised by the trainer).
Case study
It is the end of the June financial quarter and all departments in the Jackson's hotel are preparing financial and statistical reports.
Task 1: Prepare a profit and loss statement
• Go to Appendix 3.
• Complete the Bistro profit and loss statement- June quarter by calculating all missing dollar value and percentage variances.
• Save the completed profit and loss statement locally as Bistro reports.
• You don't have to submit the completed profit and loss statement yet. You will do so after you complete Task 2.
Task 2: Prepare a statistical report
• Go to your locally saved files folder and open Bistro reports.
• Complete the Trend analysis report - June quarter using the information provided.
• Save the completed trend analysis report as Bistro reports.
• Save the completed reports locally and submit to your assessor once completed.
Task 3: Prepare a management report
• Prepare a detailed report for management outlining the following information regarding the June quarter:
• Positive and negative budget variations indicated in monthly and quarter analysis reports and profit and loss statement that are significant enough to affect the operation of the bistro and its profitability.
• Trends identified in the trend analysis report that have the potential to affect the bistro's profitability in the immediate future.
• Possible reasons for the positive or negative variations and trends.
• Any recent actions that have been taken or changes to operational procedures as a result of trends and deviations.
• Base the report on the following information:
• Profit and loss statement
• Trend analysis report
• April, May and June comparative analysis reports
• Case study information provided in Assessments AT3 and AT4
• Your responses to questions in Assessments AT3 and AT4
• The report should present information in a clear, concise and easy to understand manner so it supports good decision-making processes.
• Save your completed management report as Management report.
• Submit the completed report to your assessor once completed.
Task 4: Question and answer
Q1: The following factors must be considered when preparing financial and statistical reports. Select three factors that are relevant to one or more of the reports you prepared or completed in Tasks 1, 2 and 3.
Discuss how they influenced preparation or outcomes of the report(s).
Factors for consideration in the preparation of financial and statistical reports.
• Performance of department, project and/or products and services
• Daily, weekly and monthly transactions
• Variances in income and/or expenditure
• Sales performance
• Sales returns
• Staff costs
• Cash flow
• Covers and financial return
• Expenditure
• Income
• Occupancy rates and financial return
• Stock levels
• Wastage
• Yield
Assessment task 6: Observation
Required documents and equipment:
- Computer with internet connection to refer to various resources.
- Student assessment booklet and a pen (organized by the student).
- RGIT Learners' resources for the unit SITXFIN003 - Manage finances within a budget (organised by the trainer).
FOR ROLE PLAY PRESENTATION:
Make presentation in Ms Word and it should be 6 to 8 pages presentation and in this presentation describe all of these topics:
• Outline the Jacksons Hotel operational budget?
• Outline the JJs Bistro budget for the June Quarter?
• Explain the goals and targets in the April, May and June budget and the reasoning behind them?
• Explain the decisions they made about resources when developing the budgets?
• Outline the importance of controlling variable costs?
• Explain the different approaches they took to improve budget performance and the pros and cons of each?
Attachment:- budget project.rar