Assessment Tasks and Instructions
Date
Unit of Competency and Code SITXFIN004 Prepare and monitor budgets
Student Name
Student Number
Trainer/Assessor
Assessment for this Unit Please Tick Details
Assessment 1 Assignment
Assessment 2 Assignment
Assessment 3 Assignment
Statement of Authenticity
I acknowledge that I understand the requirements to complete the assessment tasks and confirm that this is my own work and I have acknowledged or referenced all sources of information I have used for the purpose of this assessment
Student Signature: Date: / /20
Assessment 1 Guidelines . What will be assessed.
The purpose of this assessment is to assess your underpinning knowledge to complete the tasks outlined in the elements and performance criteria for this unit of competency and relating to the following aspects:
• types of budgets: o cash budgets o cash flow budgets o departmental budgets o event budgets o project budgets o purchasing budgets o sales budgets o wage budgets
o whole of organisation budgets
• budget terminology
• specific industry sector and organisation:
o role and nature of budgets
o budget formats, budget performance and financial reports o financial reporting procedures and cycles
o features and functions of accounting software programs used to prepare and monitor budgets
• internal and external factors that impact on budget development:
o growth or decline in economic conditions
o human resource requirements o new legislation or regulation
o organisational and management restructures o organisational objectives o scope of the project o shift in market trends o significant price movement for certain commodities or items o supplier availability and cost
• budget preparation and monitoring practices and techniques:
o sources and contents of data required for budget preparation:
competitor research customer or supplier research
declared commitments in areas of operation financial information from suppliers financial proposals from key 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
o techniques for making budget estimates o common reasons for deviations and budget deviation management.
Instructions for assessment including WHS requirements
Answer the questions for this assessment below.
You are required to address all questions to achieve competence. Your trainer will provide you with instructions for time frames and dates to complete this project.
Once completed, carefully read the responses you have provided and check for completeness. Your trainer will provide you with feedback and the result you have achieved.
Assessment 1
Your task: Answer each question below.
(Criteria Defining Acceptable performance)
All questions must be answered correctly in the first attempt. If any are answered incorrectly, the trainer will assess them verbally. If the student is unable to answer them verbally then it will be deemed “Not Yet Competent” for the assessment.
1. Name 4 business considerations you might consider when researching a budget.
Response
1.
2.
3.
4.
2. Describe how the following sources of data can be used for budget preparation.
Response
Competitor research –
Customer or supplier research –
Declared commitments in areas of operation –
Financial information from suppliers –
Financial proposals from key stakeholders –
Performance data/information from previous time periods –
Departmental, event or project budgets –
Grant funding guidelines or limitations –
Management policies and procedures –
Organizational budget preparation guidelines –
3. Explain how the following internal factors can impact on budgets.
Response
Management restructure –
Human resources requirements –
New projects and business objectives –
Changes in commodity or service prices –
4. Explain how the following external factors can impact on budgets.
Response
Legislation and regulations –
Changes in the global economy –
Market trends –
5. How does involving staff “from the bottom up” in the budgeting process, help the business?
Response
6. What does the process of preparing a draft budget usually involve?
Response
7. How does breaking the budget down into groups, departments, or income and expense categories help colleagues?
Response
8. Name 3 people (job roles) you would circulate the draft budget to for feedback or approval:
Response
1.
2.
3.
9. The budgeting process requires strong negotiation skills. Why is it important to convince staff of the achievability of the budget?
Response
10. A staff member suggests a change or alteration to the budget. List 3 aspects you need to consider to ensure any changes would have no negative impacts:
Response
11. In most businesses/industries, when must the budget be complete?
Response
12. What information should department managers include in their monthly reports?
Response
13. How often should the budget be compared to the actual accounting results?
Response
14. Name and describe 5 financial reports you might generate from your accounting system to check your budget against actual income or expenditure.
Response
1.
2.
3.
4.
5.
15. Every revenue and expense item on the Profit and Loss Statement should be compared to what?
Response
16. When revenue variances occur, why is talking to staff a good way to help identify and find options to address the issue?
Response
17. List 3 factors that can cause variances in staff budgets.
Response
1.
2.
3.
18. Why is monitoring your budget progressively throughout the year so important?
Response
19. How can you collect information to help create future budget plans?
Response
20. Name an accounting program you can use to help manage budgets.
Response
21. Explain each of the following types of budgets:
Response
Cash budget/Cashflow budget –
Departmental budget –
Event budget –
Project budget –
Purchasing budget –
Vanshraj Enterprises P/l Trading As Victorian Academy Of Commerce and Technology Startups
RTO No. 41428 CRICOS Provider Code 03477E email: vactsedu@gmail.com
171 Sydney Road,Coburg-3058
VACTS Ver 1.4 June 2020
Sales budget –
Wage budget –
Master budget –
Assessment 2 Guidelines
What will be assessed
Performance Evidence
The purpose of this assessment is to assess your ability to complete tasks outlined in elements and performance criteria of this unit in the context of the job role, and:
• prepare a budget for a business that meets the specific business’ needs • demonstrate the following when preparing the above budget:
o consultation on components
o analysis of factors that impact on the budget
o completion of draft and final versions of budget within designated timelines
Knowledge Evidence
• types of budgets: o cash budgets o cash flow budgets o departmental budgets o event budgets o project budgets o purchasing budgets o sales budgets o wage budgets
o whole of organisation budgets
• budget terminology
• specific industry sector and organisation:
o role and nature of budgets
o budget formats, budget performance and financial reports o financial reporting procedures and cycles
o features and functions of accounting software programs used to prepare and monitor budgets
• internal and external factors that impact on budget development:
o growth or decline in economic conditions
o human resource requirements o new legislation or regulation
o organisational and management restructures o organisational objectives o scope of the project o shift in market trends o significant price movement for certain commodities or items o supplier availability and cost
• budget preparation and monitoring practices and techniques:
o sources and contents of data required for budget preparation:
competitor research
customer or supplier research declared commitments in areas of operation financial information from suppliers financial proposals from key 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
o techniques for making budget estimates o common reasons for deviations and budget deviation management.
Resource Requirements
Computer with Microsoft excel Calculator Spread Sheets:
“Task 1-Hotel VACTS Budget_Forecast”
“Task 2-Budget VACTS_Restaurant_Bar”
Instructions for assessment including WHS requirements
The assignment for Assessment 2 consists of 3 Tasks
Task 1
Requires you to prepare a draft budget following a meeting with all heads of department where you have finalised the details and requirements to be included for next year’s budget.
Task 2
Requires you to prepare a final budget, based on the changes made to your draft budget following a management meeting.
Task 3
Requires you to respond to 3 financial scenarios.
All responses must be typed and clearly referenced to each task. Your trainer will provide you with feedback for each task. You will be provided with the opportunity to rectify any shortfalls based on the feedback from submitted work for this assessment.
Each completed spreadsheet must be attached to the relevant task and clearly referenced.
Assessment 2
Task 1
Your Tasks:
You are required to complete a draft budget based on information and factors that were determined during an executive meeting at Hotel VACTS.
A. Access the excel spreadsheet named “Task 1-Hotel VACTS Budget_Forecast”. The first tab on this spreadsheet is labelled “Departments Small” and shows the existing budget figures for the 2016 financial year.
B. Use the template “Draft Budget” on the second tab of the spreadsheet and perform the calculations below using basic formulas.
Your forecast needs to include the Dollar Figures and the % values for these affected by changes outlined below.
The % values must be listed for each expense item shown in the Expenses Analysis for Catering department.
You have met with the catering department head of Hotel VACTS and the following details have been discussed to prepare your draft budget for 2017:
1. Catering:
a. The food revenue will be increased by 15% due to a new marketing campaign and specialty menus
b. The beverage revenue will increase by 8%.
c. Staff costs need to be adjusted to 44% of the food budget.
Total Catering Revenue $
4,264,241.52
Forecast$ Forecast %
Food Budget Expenses Analysis
Total Revenue $
2,019,370.53 47% COGS $
601,944.02 30%
Food Revenue $
1,740,112.81 86% 15% Staff costs $
1,122,433.2
4 56%
Beverage Revenue $
279,257.72 14% 8% Other Expense
s $
121,742.75 6%
Step 1. Calculate 86% of 1740112.8 = forecast $
Step 2. Calculate 15% of forecast $ (as calculated in step 1) add then add 15% to the forecast $ for food revenue.
Step 3. Do the same for beverage revenue.
Task 2
Your Tasks:
You have provided the chief financial controller with the draft budget for 2017. Following the recent executive meeting where the draft budget was discussed, you are now required to establish the final budget reflecting the changes based on the latest actuals and variances as well as major road works which will affect VACTS Restaurant and Bar during 2017.
A. Refer to the excel spread sheet named “Task 2-Budget VACTS_Rest.&Bar”. The spreadsheet is labelled “VACTS Restaurant and Bar” and shows the Draft budget figures for the 2017 financial year.
B. Use the template “Revised Budget” on the second of the spreadsheet and perform the calculations below using basic formulas based on the following changes: Task 2 Budget VACTS_Rest.&Bar
Month Customer numbers Average Spend (Food) Average Spend (Beverage)
January 1850 $ 45.00 $ 9.70
February 2000 $ 37.00 $ 9.70
March 700 $ 42.00 $ 9.70
April 1200 $ 48.00 $ 9.70
May 1200 $ 36.50 $ 9.70
June 600 $ 35.00 $ 9.70
July 950 $ 34.00 $ 9.70
August 800 $ 38.00 $ 9.70
September 900 $ 29.00 $ 9.70
October 650 $ 29.50 $ 9.70
November 980 $ 35.50 $ 9.70
December 2200 $ 48.00 $ 9.70
1. Calculate the anticipated Food revenue for each month and the yearly total.
2. Calculate the anticipated Beverage revenue per month and the yearly total.
3. Calculate the Total Revenue for each month and the yearly total.
4. Calculate the overheads total for each month (at 90% of turnover for each for each month with 1000 or more customers and at 96% for each month with less than 1000 customers) and the yearly total.
5. Calculate the profit for each month and the yearly total.
6. Calculate the Cost of Goods Sold for food and beverages, given a combined percentage of 32%.
7. Calculate the staff costs for each month at 31% for each month with 1000 or more customers and at 35% for each month with less than 1000 customers.
8. Calculate the ‘Other overheads” for the operation.
9. Print a copy of the revised budget.
10. Print the revised budget showing all formulae used.
1. Calculate the anticipated Food revenue for each month and the yearly total.
Month Customer numbers Average Spend Food Revenue
January 1850 $45.00 $ 83,250.00
February 2000 $37.00
March 700 $42.00
April 1200 $48.00
May 1200 $36.50
June 600 $35.00
July 950 $34.00
August 800 $38.00
September 900 $29.00
October 650 $29.50
November 980 $35.50
December 2200 $48.00
Total
2. Calculate the anticipated Beverage revenue per month and the yearly total.
Month Customer numbers Average Spend Beverage Revenue
January 1850 $9.70 $ 17,945.00
February 2000 $9.70
March 700 $9.70
April 1200 $9.70
May 1200 $9.70
June 600 $9.70
July 950 $9.70
August 800 $9.70
September 900 $9.70
October 650 $9.70
November 980 $9.70
December 2200 $9.70
Total
3. Calculate the Total Revenue for each month and the yearly total.
Month Customer numbers Average Spend Food Revenue Beverage Revenue Total
January 1850 $45.00 $ 83,250.00 $ 17,945.00 $101,195.00
February 2000 $37.00
March 700 $42.00
April 1200 $48.00
May 1200 $36.50
June 600 $35.00
July 950 $34.00
August 800 $38.00
September 900 $29.00
October 650 $29.50
November 980 $35.50
December 2200 $48.00
Total
4. Calculate the overheads total for each month (at 90% of turnover for each for each month with 1000 or more customers and at 96% for each month with less than 1000 customers) and the yearly total.
Month Total Overheads
January $101,195.00 $ 91,075.50
February $ 93,400.00
March $ 36,190.00
April $ 69,240.00
May $ 55,440.00
June $ 26,820.00
July $ 41,515.00
August $ 38,160.00
September $ 34,830.00
October $ 25,480.00
November $ 44,296.00
December $126,940.00
$693,506.00
Total $693,506.00
5. Calculate the profit for each month and the yearly total.
Turnover Total Profit Overheads
January $101,195.00 $10,119.50 $ 91,075.50
February $ 93,400.00
March $ 36,190.00
April $ 69,240.00
May $ 55,440.00
June $ 26,820.00
July $ 41,515.00
August $ 38,160.00
September $ 34,830.00
October $ 25,480.00
November $ 44,296.00
December $126,940.00
$693,506.00
Total $693,506.00
6. Calculate the Cost of Goods Sold for food and beverages, given a combined percentage of 32%.
Turnover Total COGS – Food & Beverage
January $101,195.00 $ 32,382.40
February $ 93,400.00
March $ 36,190.00
April $ 69,240.00
May $ 55,440.00
June $ 26,820.00
July $ 41,515.00
August $ 38,160.00
September $ 34,830.00
October $ 25,480.00
November $ 44,296.00
December $126,940.00
$693,506.00
Total $693,506.00
7. Calculate the staff costs for each month at 31% for each month with 1000 or more customers and at 35% for each month with less than 1000 customers.
Turnover Total Staff Costs
January $101,195.00 $ 31,370.45
February $ 93,400.00
March $ 36,190.00
April $ 69,240.00
May $ 55,440.00
June $ 26,820.00
July $ 41,515.00
August $ 38,160.00
September $ 34,830.00
October $ 25,480.00
November $ 44,296.00
December $126,940.00
$693,506.00
Total $693,506.00
8. Calculate the ‘Other overheads” for the operation.
Month Overheads COGS – Food & Beverage Staff Costs Other Overheads
January $ 91,075.50 $ 32,382.40 $ 31,370.45 $ 27,322.65
February $ 84,060.00
March $ 34,742.40
April $ 62,316.00
May $ 49,896.00
June $ 25,747.20
July $ 39,854.40
August $ 36,633.60
September $ 33,436.80
October $ 24,460.80
November $ 42,524.16
December $114,246.00
$638,992.86
Task 3
Your Tasks:
Read the following 3 scenarios and answer the questions attached for each scenario.
Scenario 1:
The finance team has created budget forecasts for Hotel VACTS based on carefully researched factors for the last 3 years and these were always very accurate. The recent budget which included all departments of the hotel was implemented 3 months ago and the forecasted figures for Food Cost and COGS/Beverages in both the Restaurant and the Bar Operations have blown out by nearly 4.5 percent.
What could be the reasons for this? List 5 examples of areas you would investigate and explain why.
Scenario 2:
Hotel VACTS has successfully operated for 7 years. During this period, overall turnover has doubled, and during the past 3 budget periods annual budgets have been increased by 15% each year which was exceeded each time. During the last 6 months however, management has noticed that the opposite trend seems to be occurring now.
List 5 external factors which could contribute to this and explain which methods you would use to determine this.
Scenario 3:
You have successfully negotiated the draft budget with each department head of the Hotel which has now been approved by the director and implemented 6 weeks ago.
You have finalised the financial data of the Hotel for the next management meeting and noticed the following:
a.
Department Budget Actual Variance
Kitchen/Food Cost 28% 32% (-)$ 13467
b. The recently appointed F&B Manager has purchased 240 bottles of Hill of Blessings @ $90 each which represents a saving of $30 per bottle. However this exceeds the par stock level by 220 bottles and has created a cashflow problem, given the negative performance of the kitchen during this period as well.
1. Which reports would you need to prepare for these issues?
2. Who is it essential to involve when these matters need to be discussed?
3. Suggest options to address and rectify these issues.
4. How could the cashflow issue be addressed?
Practical Assessment 2 – Criteria defining acceptable performances
Task 1and Task 2(example calculation provided on excel sheet above.)
Task 3
Your Tasks:
Read the following 3 scenarios and answer the questions attached for each scenario.
Scenario 1:
The finance team has created budget forecasts for Hotel VACTS based on carefully researched factors for the last 3 years and these were always very accurate. The recent budget which included all departments of the hotel was implemented 3 months ago and the forecasted figures for Food Cost and COGS/Beverages in both the Restaurant and the Bar Operations have blown out by nearly 4.5 percent.
What could be the reasons for this? List 5 examples of areas you would investigate and explain why.
Student responses may vary and depend on industry sector and department they may be engaged in.
Realistic option could include e.g.:
• Excessive wastage/ Breakage/ Leakage /Spoilage etc.
• Theft
• Inaccurate Stock reporting procedures
• Equipment condition (This could include Reticulation systems, Faulty kitchen equipment contributing to wastage)
• Lack of Skills from staff
• Poor Quality of Perishables
• Portion Control Issues/ Recipe Management
• Price Increases
Scenario 2:
Hotel VACTS has successfully operated for 7 years. During this period, overall turnover has doubled, and during the past 3 budget periods annual budgets have been increased by 15% each year which was exceeded each time. During the last 6 months however, management has noticed that the opposite trend seems to be occurring now.
List 5 external factors which could contribute to this and explain which methods you would use to determine this.
Student responses may vary and examples depend on specific industry sector and experience. At this level of training however the following aspects need to be considered and are indicative:
Marketing and sales campaigns used
Pricing Strategies compared to opposition in the area
Political factors e.g. elections, unemployment
Infrastructure issues e.g. building activities that may affect access, noise, slowed traffic etc.
Negative feedback, customer dissatisfaction
Accounting errors, incorrect data management/ variables etc.
Change of management or internal procedures etc.
Scenario 3:
You have successfully negotiated the draft budget with each department head of the Hotel which has now been approved by the director and implemented 6 weeks ago.
You have finalised the financial data of the Hotel for the next management meeting and noticed the following:
c.
Department Budget Actual Variance
Kitchen/Food Cost 28% 32% (-)$ 13467
d. The recently appointed F&B Manager has purchased 240 bottles of Hill of Blessings @ $90 each which represents a saving of $30 per bottle. However this exceeds the par stock level by 220 bottles and has created a cashflow problem, given the negative performance of the kitchen during this period as well.
5. Which reports would you need to prepare for these issues?
Variance report, Cashflow report, Department reports (as relevant to the organisation and procedures)
6. Who is it essential to involve when these matters need to be discussed?
F&B Manager, Exec. Chef, CFO, Operations Manager, GM/CEO.
Discussion points: Reasons for Variance, procedures to be followed or [lack of procedures in place], actions for rectification; in case of negligence or misconduct/incompetence a warning or final warning could be considered in some organisations depending on procedures and initial conditions set out.
7. Suggest options to address and rectify these issues.
Kitchen: Identify cause issues and rectify; review or re-negotiate prices; adjust calculation or offerings where factors are beyond control [pricing, seasonal factors, availability etc.]; establish or rectify portion control and recipe factors; staff training etc.
8. How could the cashflow issue be addressed?
F&B: Contact supplier and negotiate return of, or part of delivery; negotiate extended payment term; consider over draft; re-consider provisions for cash flow budget and measures, organise specials or an event which incorporates excess stock, etc.
Assessment 3 Guidelines
What will be assessed–Performance Evidence
The purpose of this assessment is to assess your ability to complete tasks outlined in elements and performance criteria of this unit in the context of the job role, and:
• prepare a budget for a business that meets the specific business’ needs • demonstrate the following when preparing the above budget:
o consultation on components
o analysis of factors that impact on the budget
o completion of draft and final versions of budget within designated timelines
• monitor and review the above budget against performance over its life cycle.
Resource Requirements
Assessment must ensure access to:
1. Computers, printers and accounting software packages
2. Financial and operational data and reports used to prepare budgets to be provided by the RTO, relevant to a business in the Tourism, Travel, Hospitality or Events sector course stream where the student is enrolled or undertakes practical training. The budget may be for an entire organisation, for a department or for a particular project or activity.
3. Others with whom the individual can discuss, and negotiate draft and final budget components
Instructions for assessment including WHS requirements
Your trainer will provide you with or arrange for financial data to prepare a budget for a business relevant to your course stream and/or area or training/workplace for a specific period, e.g. a quarter, six months or as relevant.
Assessment 3
Budget Project
Task
Prepare a budget for a business that meets the specific business’ needs.
Business Name: ______________________________________________
Supervisor/Manager: ______________________________________________
Business Address: ______________________________________________
Type of Operation: ______________________________________________
Type of Budget: income and expenses
I herewith confirm that I have received all data and information to enable me to complete the assessment task outlined in this document.
Student Signature: __________________________ Date:
________________________________
Instructions
VACTS restaurant has provided the previous P/L statement below.
VACTS anticipates:
a. 5 % rise in sales each year, and
b. 4% rise in direct cost of sales.
Additionally VACTS restaurant feels all other expenses should be budgeted for 3 % increase in line with inflation rate in Australia.
Your Task A
Prepare a draft budget given the below assumptions. And answer the following questions
1) What factors affect a restaurant budgeted expenses.
2) What methods would you use to get feedback and communicate information on a budget and who are the parties that should be consulate.
Previous Year P/L statement
Format of Profit and Loss
Year 1
Sales $2,000,000
Direct cost of sales $1,300,000
Other 0
Total cost of sales $1,300,000
Gross margin $700,000
Gross Margin %
Expenses 35.00%
Payroll $300,000
Sales and marketing and other expenses $80,000
Depreciion $7,000
Leased equip/van/dispensing system $12,000
Utilities $24,000
insurance $20,000
Other taxes $24,000
Other 0
Total operating Expenses $467,000
Task B
Prepare a final budget after incorporating the feedback provided by your head chef (assessor).
Staffs have been consulted and the following feedback has been given taking into account the current market situation.
a. Sales could be affected due to renovations by 12%.
b. Shortage of staff and hence causal staff will be paid 10% more to attract staff easily. So payroll will be increased.
c. Sales and marketing expenses will increase by 5 % due to increase competition.
3. Prepare the final budget given the above feedback.
Format of Profit and Loss
Draft Final
Sales $2,100,000
Direct cost of sales $1,352,000
Other 0
Total cost of sales $1,352,000
Gross margin $748000
Gross Margin %
Expenses 28%
Payroll $309000
Sales and marketing and other expenses $82400
Depreciion $7,210
Leased equip/van/dispensing system $12,360
Utilities $24720
insurance $20,600
Other taxes $24,720
Other 0
Total operating Expenses $467,000
Format of Profit and Loss
Actual
Draft Final figure variance
Sales
Direct cost of sales
Other
Total cost of sales
Gross margin
Gross Margin %
Expenses
Payroll
Sales and marketing and other expenses
Depreciion
Leased equip/van/dispensing system
Utilities insurance
Other taxes
Other
Total operating Expenses
4. Refer to the actual figure
Write a report to answer the following questions and communicate to senior management on the budget status.
a. Calculate and identify the positive and negative variances (look at drop in sales or rise in expenditure compare to the budget.)
Final figure – actual figure = variance
b. What factors affect sales in a restaurant?
c. How can sales are improved to achieve budget figure.
d. What factors affect direct cost of sales in a restaurant?
c. How can expenses are reduced to improved gross margin and net profit for a restaurant.
Q
. The criteria provided defining Acceptable performance S NYS S NYS Comments
Consultation
The consultation includes individuals relevant to the budget
The scope of the budget is discussed – Eg Budgeted Profit and
Loss
The budget factors have been analysed
The scope of the budget has been confirmed
2 Draft Budget
The draft budget is prepared correctly
Each factor is reflected in the draft budget
The income and expenditure is supported by valid information
The organisational objectives are reflected in the draft budget
The recommended and agreed changes are outlined in the draft budget as per eg. provided
3 Present Draft Budget
The draft budget is presented to the relevant parties
The budget components are reviewed
Required changes are negotiated and documented
The final changes are approved by an authorised person
4 Prepare Final Budget
The final budget is prepared within agreed timeframes
All negotiated details are reflected in the final budget
The budget data is correct
The final format for the budget is professional to industry standard
The final budget is approved and signed
5 Monitoring Budget
The budget performance is monitored according to the agreed intervals
The variances are calculated
All under-over performances have been identified correctly
6 Reviewing Budget performance targets
Actions have been suggested where deviations have been identified
The recommended actions are relevant
The recommended actions are realistic given operational aspects
Changes of internal and external factors analysed are reflected in changes to the budget
Where changes are made, these are communicated to all relevant parties
Actioned changes to the budget are approved by authorised staff
7 Evaluation of Budget
The budget is evaluated reflecting performance
Suggestions are provided for future improvements, reflected in the summary report.
