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Sitxfin003 manage finance with budgets
commercial cookery (SIT30816)
Victoria University
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Student Number APEX Student Name HITESH Email Hiteshjagga99@gmail Course Title Certificate IV in commercial cookery Unit Code and Title SITXFIN
Assessment Task No. / Title
☐ 1. Unit Knowledge Assessment (UKA) ☐ 2. Unit Skills Assessment (USA) Trainer Name MR. ANIL
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Student Signature I declare that I have read and understood the above declaration. Student ID: APEX4712 Student Name: HITESH Date: 07/08/202 0
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should be followed when collecting data to form budgets
expenditure priorities Gather data and suggestions from various cost centres Draw up and present draught budget so that reviews can be given Check with and consult all related staff about resource decisions Support awareness of the importance of controlling the budget
QUUESTION 4
Define the following type of budgets by briefly describing their scope
ANSWER 4
a.) Wage Budget - Money paid over a predefined timeframe to pay compensation with. While arranging auxiliary changes or individual worker enhancements, account must be taken of the Wage financial plan.
b.) Purchasing Budget - A buying spending plan incorporates the measure of stock a business is relied upon to purchase over each spending period. The sum indicated in the spending plan is the sum required to guarantee that stock is accessible to meet purchaser orders for products.
c.) Event Budget - The occasion spending plan is an expectation (hinting) of the benefit and cost the occasion would create based on arrangements made and data assembled. Spending arranging is a significant piece of occasion the board.
d.) Projects Budget - An undertaking spending plan is the general assessed cost expected to finish a task for a given timeframe. It's utilized to foresee what venture expenses would be for each undertaking procedure. The spending plan for the undertaking will incorporate things like work costs, material acquisition costs and working expenses.
QUESTION 5
The following factors must be considered in the preparation of financial
and statistical reports. Provide a brief explanation of each factor by
explaining the scope and the information it provides. [100-160 words]
Cashflow It reflects the movement of money within the businesses during a particular period.
Occupancy Rate In order to determine the ratio for the certain things in businesses, this term is used and it is basically used in business such as hospitals & hotels or many more.
Sales Performance It originally states the revenue related activities and its value against the targets of the company.
Variance in
income/expenditur
e
Basically it gives the difference between revenue and expenses and is indicated by Profit = I-E relationship where negative means risk.
Expenditure “the action of spending funds.” Is known as Expenditure An example of an expenditure is the money spent on office equipment that you have purchased.
Cover Cover basically means taking action to decrease a particular liability or obligation. In many cases, this means completing an offsetting transaction. For example, if an investor is shorting a stock and wants to eliminate the risk of a short squeeze, then she will "buy to cover."
Stock levels The part of a firm's assets that are held in the form of raw materials, work in progress and finished goods. These are also known as inventories.
Wastage A wasting asset is an item that has a limited life span and irreversibly declines in value over time. Such fixed assets could be vehicles and machinery. However, in the financial markets, the term refers to options contracts since the contract will continually lose time value after purchase
QUESTION 6
What is the purpose of preparing a draft budget? What are some
possible benefits?
ANSWER
A budget draft is expected to give you a visual diagram of the foreseen monetary consequences of your business exercises. It offers a few preferences, for example, the advantage of purchasing and sparing chances, how you isolate your assets and how far you go in accomplishing your budgetary destinations.
QUESTION 7
In analysing a budgets results and ensuring it is effective in providing insight into a business’ financial performance, what must you compare every revenue and expense item on the profit and loss statement with? [10- words]
ANSWER
A budget is an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis. Budgets can be made for a person, a group of people, a business, a government, or just about anything else that makes and spends money.
QUESTION 11
Why is it important that staff understand a budget and associated target?
ANSWER
If employees are optimistic about the budget, they are more likely to support it and do their utmost to work towards the goals set**.**
QUESTION 12
Which key processes need to be followed and analysed when reviewing and updating a budget? Explain your answers with examples relating to the Hospitality Industry.
ANSWER
At the point when proprietors and managers have gathered inward and outside
information sources, the activity begins where all information sources must be checked
and assessed for immaterialness, legitimacy and readiness during the time spent
arranging the spending plan. Starting with earlier years' business, proprietors and overseers must fuse the information gave by both the inward and outside information they
have acquired. Frequently proprietors and chiefs end up responding to questions
for example,
Will the item cost increment or decline?
What, assuming any, will be the change to the volume of item sold?
Will the planning of deals change from past periods?
USA
PART 1
TASK 1
2019
BUDGET Department Allocated funds Operations $2,412, marketing $689, finance $1,033, human resources $2,756, total expenditure $68,91,
TASK 2
Operation department
Being the representative of the operation department, I want to inform that
last year (2018) we had a shortage of $137,830 and we cannot face the same
this year too, please make the amendments in the budget accordingly. Also,
this year an additional $206,745 is required to meet organization’s growth
goals. All together we need 2,756,
Marketing department
In this department last year, we just used 80% of the total amount allocated
which is $551,320. So, we had an extra of $137,830 and I hope in 2019 also
we need the same amount that we used last year. The extra amount should
be allocated to other departments wherever required.
Finance department
This year we are implementing a new accounting software due to which we
are going to save $551,320 from the estimated expenses. So, this amount
can be used to fulfil other needs. For this department we just need 482,
Human resource department
Just like operation department, we also have to focus on growth of the
organization for which would need to hire more employees for which we need
3% of the total forecasted revenue. Including the additional amount, we
need $3,101,
2019
BUDGET
budget given by various departments, resulting in the new allocation of 2019
funds provided in the TASK 2 of this Assessment.
DECISIONS/CHANGES MADE :-
- OPERATION DEPARTMENT –
$2756600 have been allocated replacing $2412025 because of the request made upon the requirement of additional funds. 2. MARKETING DEPARTMENT –
Excess amount was given which is now taken back in the new allocation. 3. FINANCE DEPARTMENT –
Saved on the money spent on acquiring Accounting Software which is cheaper than Expected. 4. HR DEPARTMENT –
Additional money is given for attaining Additional Staff members shown in new funds of 2019 Budget.
These changes were required for the appropriate solution and working of
these departments.
IMPORTANCE OF BUDGET ALLOCATION AND ITS NECESSITY : -
Ordinarily, spending plans are looked into every year and are set up for a 12
or two year timeframe. Financial plans are typically settled based on the uses
that were made during the earlier year, with the expansion or deduction of
any progressions that have occurred in spending; the employing of new staff
individuals or the alteration of pay rates, for instance. For example, in a
business, every division is conceded a pre-decided measure of cash to spend
through the span of a year or two years. Regularly, the top of every office is
answerable for distributing the financing to the staff that works in that office.
The objective of a financial plan is consider all consumptions in every office.
Financials are one of the most significant parts of any undertaking. It involves
an assortment of perspectives; spending distribution being one of the angles.
In this article, we will characterize spending assignment, distinguish its
segments, and clarify why it is such a fundamental piece of business
everything being equal and all portions
PART 2
TASK 1
Budget 2019 Actual 2019 Variation Percentage Revenue 9,845,000 9,624,428 220,572 2% Departments Operational 2,756,600 2,536,072 220,528 8% Marketing 551,320 606,452 -55,132 -10% Finance 482,405 482,405 0 0 Human resource
3,101,175 3,287,246 -186,071 -6%
Annual Year-End Financial Performance Review Form
Name of Reviewer: HITESH Date: 06/08/ Year in Review: 2019 What was the profit for the year in review? Please provide a short description and justification.
$ 2,712,253 is the actual profit of 2019 which is LESS than the expected profits of this year as the assumed profits were taken as $2,953,500.
Was there any exceptional financial activity which has caused the year in review’s financial performance to be different from previous years? If yes, please explain.
Marketing department showed the most significant difference in the performance of budget having the negative variance of 10%.
Were there any deviations greater than 5% in the year in review from the budget?
YES ; OPERATION DEPARTMENT
PART 3
####### TASK 1
Expenditure
NBH Figures Industry Average Variance percentage Operating Expenses
Room Cleaning $564,040 $452,924. ($111,115. ) -19. Room Furnishing $446,000 $495,060 $49,060 11 Building Maintenance $320,600 $355,866 $35,266 11 Utilities $263,900 $188,424 ($75,475) -28. Lobby Cleaning $157,000 $175,840 $18,840 12 Hotel Management Software
$256,000 $368,640. $112,640 44
Landscaping $177,532 $262,214. $84,682.
- 7 External Operators Fee $351,000 $350,000 ($1,000) -0.
TASK 2
To: nbhfinancemanager@nbh.com From: hiteshjagga99@gmail Respected sir, Hope you are doing well , As per your guidelines , I have already made a short description of all the budgeting elements.
1. Incremental Budgeting
It is a budget prepared using a previous period's budget or actual performance as a basis with incremental amounts added for the new budget period.
- The allocation of resources is based upon allocations from the previous period.
ADVANTAGES:- Easy to Extract from the old records.
DISADVANTAGES :- It may be often misleading due to the incorrect extracts.
2. Activity Based Budgeting
It is a budgeting method in which budgets are prepared using Activity Based Costing after considering the overhead costs. ... Instead, the activities that
incur the cost are deeply analysed and researched. Based on the outcome of the study, the resources are allocated to an activity.
ADVANTAGES:- ease of management for the managerial tasks and records.
DISADVANTAGES :- no proper allocation will happen as there will be no
particular reason to distribute.
3. Minimum Level Budgeting
The minimum level approach is representative of these attempts to control the growth of costs not responding to unit- level drivers. Using the minimum level approach, an organization establishes a base amount for budget items and requires explanation or justification for any budgeted amount above the minimum (base).
ADVANTAGES:- Less funds required for the allocation.
DISADVANTAGES :- insufficient funds will later on causes urgent requirement
of funds.
4. Zero Based Budgeting Zero-based budgeting is a method of budgeting in which all expenses must be justified and approved for each new period. Budget cycle starts with a reset zero number.
ADVANTAGES:- No spending carried forward.
DISADVANTAGES :- time consuming process with concentration on various
departments.
PART 4
Finance Department – Internal Reporting Form Name of Reviewer: Date of Review: 01/01/2020 – 31/03/ Was the previous year budget and the approach adopted successful in managing the financial resource allocation requirements for the NBH? Yes it can be said from the above statistics that it was effective in managing the financial allocation for NBH.
Are there any recommended changes to the budgeting approaches for the year ahead? If so, please explain.
Incremental B udgeting will be advice to be in use because of its easy to make and static quality over customer advantages.
How would the recommended changes impact upon the organisations departments? It will have some lasting effects over the organization because these are been imported from last records.
Sitxfin003 manage finance with budgets
Course: commercial cookery (SIT30816)
University: Victoria University
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