SITXFIN004 Prepare and monitor budgets

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Assessment Cover Sheet

Student name:	Student ID:
Student email:	Phone:
Unit of competency code: SITXFIN004	Unit of competency Name: Prepare and monitor budgets
Task Number:	Trainer name:

 I declare that the work contained in this Assessment Task is my own, except where acknowledgement of sources is made. I keep copy of these assignment submitted for my record.

 I have read the BIT’s Plagiarism Policy and Procedures.

 I understand the consequences of engaging in plagiarism and collusion.

Student signature:

Date:

Please note: You are advised to keep a copy of all your work submitted to the institute.

For office use only:

Date received from student:

Name and signature of Trainer/Assessor:

——————————————————————————————————– Student Receipt (to be completed by BIT staff only)

Unit(s) of competency (code and name): SITXFIN004 – Prepare and monitor budgets
Student name:	Student ID:
Staff member signature:	Date:

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ASSESSMENT SUMMARY / COVER SHEET

This form is to be completed by the assessor and used as a final record of student competency. All student submissions including any associated checklists (outlined below) are to be attached to this cover sheet before placing on the students file. Student results are not to be entered onto the Student Management Database unless all relevant paperwork is completed and attached to this form.
Student Name:
Student ID No:
Final Completion Date:
Unit Code:	SITXFIN004
Unit Title:	Prepare and monitor budgets
Please attach the following documentation to this form	Date	Result S = Satisfactory NS = Not Satisfactory NA = Not Assessed	Date	Reassessment S = Satisfactory NS = Not Satisfactory NA = Not Assessed
Assessment 1	 Debtors control ledger attached  Stock control ledger attached  Creditors control ledger attached  Budgeted cash flow statement attached  Comments on cash flow attached  Budgeted P&L Statement attached  Report on expected performance attached  Checklist attached		S | NS | NA		S | NS | NA
Assessment 2	 Initial budget attached  Written recommendations for new vehicle attached  Updated budget attached  Recommendation attached  Checklist attached		S | NS | NA		S | NS | NA
Assessment 3	 Budget variance report attached  Predicted cash balance attached  Actual cash balance attached  Report outlining probably variance reasons attached  Answer re: Quarterly vs Monthly budgets attached  Cash Flow Budget (October) attached  Checklist attached		S | NS | NA		S | NS | NA
Assessment 4	 Written Assessment	S | NS | NA	S | NS | NA
Final Assessment Result for this unit	C / NYC

Assessor Notes: (inclusive of reassessment, reasonable adjustment, further opportunities for gap training etc.): ______________

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Student Declaration: I declare that I have been assessed in this unit, and I have been advised of my result. I have been advised of and am aware of my appeal rights. Name: ____________________________ Signature: ____________________________ Date: ____/_____/_____

Assessor Declaration:I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I have provided appropriate feedback including advising the student on their appeal rights. I further declare that this assessment has been checked and is free from plagiarism Name: ____________________________ Signature: ____________________________ Date: ____/_____/_____

Administrative use only

Entered onto Student Management Database

 ________________ Date

Initials

Trainers Assessment Resource
Unit details	SITXFIN004 Prepare and monitor budgets
Assessment Type	This is a summative assessment, which requires each student to have adequate practice prior to undertaking this assessment This assessment must be undertaken in a real or simulated work environment
Assessment Methods	Case study / role-plays	Assessment 1 (Case Study – 2 budgets) Assessment 2 (Case Study / Role-play) Assessment 3 (Case Study / Role-play)
Written Assessment / Project	Assessment 4 (Written Assessment / Project)

Unit Summary

This unit describes the performance outcomes, skills and knowledge required to analyse financial and other business information to prepare and monitor budgets. It requires the ability to draft and negotiate budgets, identify deviations, and manage the delivery of successful budgetary performance. The unit applies to all tourism, travel, hospitality and event sectors. The budget may be for an entire organisation, for a department or for a particular project or activity. It applies to senior personnel who operate independently or with limited guidance from others and who are responsible for making a range of financial management decisions. No occupational licensing, certification or specific legislative requirements apply to this unit at the time of publication.

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Summative Assessment – Assessor Instructions

It is important that in conducting assessment, the assessor undertakes the following:

Prior to conducting the assessment

• Read the assessment tasks as detailed throughout this document
• Contextualise the task (and checklist) to ensure it reflects the students working environment. (Be sure to check with the mapping document to ensure any contextualisation still covers the unit requirements)
• Read the assessor instructions and checklist prior to commencing the assessment
• Ensure the assessment environment is suitable for the parameters of the task, to ensure the students will have an appropriate opportunity to demonstrates their skills
• Make suitable modifications to the assessment environment (if required), to allow all tasks to be observed
• Ensure the student is allocated the appropriate time and resources for the task
• Advise the student prior to conducting the assessment of:
  • what will occur throughout the assessment process
  • when the assessment will occur
  • the level of competency expected (review the checklist or the criteria for the task to ensure the student understands the assessment process and the expectations)
  • the RTO reasonable adjustment process and offer adjustment for any students needing assistance
  • the RTO re-assessment and appeals process
• You should not tell the student how to undertake the task, as it would lead the student and render the assessment process invalid. The student should have been taught “How” to perform each task during the training stage, and is expected to know this prior to commencing the assessment.

Conducting the assessment

• Establish and oversee the evidence gathering process to ensure it remains valid, reliable, fair and flexible
• Advise the student when to commence the assessment
• Observe the student undertake the tasks as outlined
• Record your observations in the assessor checklist
• Where a checklist point is not observed due to an inappropriate environment, or for a reason outside the students control, modify the scenario to allow the student an opportunity to perform the associated task
• Where a checklist point is not appropriate, write “N/A” in the space provided
• Incorporate allowable adjustments to the assessment procedure without compromising the integrity of the assessment. Be sure to make appropriate notations on the assessment checklist to explain any variances to the assessment process (such as probing questions, alterations to assessment environment, etc) to ensure the assessment process is transparent (and the assessment remains Valid)
• Gather supporting documentation where available and appropriate (as evidence)
• Do not interfere with the assessment unless the student’s actions impose a risk to themselves or anyone else. In the event that the actions of the student impact on the safety of any person – you are to immediately cease the assessment and take actions to reduce the identified risk.
• If a student performs an action incorrectly, mark it as such. Record what you see, not what you want to see.
• Once the assessment is complete, advise the student that the assessment has ceased, and record your comments in the sections provided.

Making and recording the decision

• The student needs to be deemed satisfactory in all assessments to gain competency.
• You are to provide feedback* to the student on their performance and/or the outcome from their assessment (whether satisfactory or not yet satisfactory)
• If a student has been assessed as “Not Yet Satisfactory” on their performance in an assessment they should be offered information about the appeal process and/or a reassessment opportunity.
• Re-assessments:
  • Re-assessments are to be undertaken on a different date. This is to allow an opportunity for the student to undergo further training as required, and to ensure the student is assessed on their ability to demonstrate their actual skills and knowledge – not just their ability to answer questions / perform actions based on immediate advice of the assessor.
  • When undertaking observation based re-assessments, students must perform the full task that relates to the observation. This means if a student undertakes an observation and is marked not satisfactory on one or more points within the observation, they must perform the task again in full.
  • If a student has been marked as satisfactory on any full observation task, they are not required to be re-assessed on that task again.
  • Written assessments (if applicable). Students are only required to be re-assessed on the questions relating to the topic they answered incorrectly in the initial assessment. For example, if the student answered Q1, 2, 3 correctly, but answered Q4+5 incorrectly; then they must be re-assessed on Q4+5 on a later date
• Using the evidence gathered and the rules of evidence (validity, reliability, sufficiency, currency and authenticity) determine the final outcome for the student. If you are in doubt, gather further evidence to help guide your decision.
• Assess the students on what you observe during the assessment period, not on their actions before or after the assessment.
• If you are marking the student NYC, ensure you outline why you have made this decision, and provide advice on how the student can improve their skills / knowledge prior to reassessment; or if the re-assessment opportunities have lapsed, provide advice on appeals and or re-enrolment.
• Record the assessment results onto the Assessment Summary / Cover Sheet, ensuring each section is complete
• Attach all evidence (projects / checklists / tests, etc) to this form.
• Submit the completed Assessment Summary/ Cover sheet and associated evidence for processing as per your RTO procedures

Providing feedback

• Provide constructive feedback to the student on their performance during the assessment period. Do not make any comments on actions undertaken prior or after the assessment period.
• Provide the student with:
  • Their assessment result
  • Clear and constructive feedback based on the assessment decision
  • The reasons underpinning your assessment decision
  • Information on ways of overcoming any identified gaps in competency revealed by the assessment the opportunity to discuss the assessment process and outcome information on reassessment and the appeals processes.
  • An opportunity for reassessment if appropriate or requested by the candidate
  • Information on appeal process as applicable to your organisation

ASSESSMENT 1 – STUDENT INFORMATION

This information is to be handed to each student to outline the assessment requirements

The owner of Cupcake Heaven, Sarah Winter, needs some assistance in preparing her budget and budget reports. She has gone through her past records thoroughly and has prepared a summary of what has happened and what is expected to happen. However she is unsure how to determine cash receipts from debtors and cash payments from creditors. She has provided the following for your information

From balance sheet
	Actual 31 July 2017	Predicted 31 August 2017
	$	$
Balance of stock control	2600	36400
Balance of debtors control	2400	2800
Balance of creditors control	8600	9600
Balance of cash at bank	3210	?
From the profit and loss statement
	Actual 31 July 2017	Predicted 31 August 2017
Cash sales	6500	6600
Credit sales	2750	2800
Cost of sales	4500	4600
Stock loss	800	800
Wages	1600	1600
Office expenses	200	200
Discount expense	110	120
Discount revenue	150	160
Bad debts	100	100

1. Reconstruct the following general ledger accounts to help Sarah with the preparation of her budgeted cash flow statement. Debtors Control, Stock Control and Creditors Control. Don’t forget to allow for 10% GST on all sales and purchases.
2. Using the above information, plus your reconstructions from part a, prepare a budgeted cash flow statement for Cupcake Heaven for the month ending 31 August 2017.
3. Taking into consideration your budgeted cash flow statement from part b, comment on the likely future cash position of this business
4. Prepare a budgeted profit and loss for the month ending 31 August 2017.
5. Write a brief report on the future performance expectations of Cupcake Heaven in related to the expected profit or loss

Assessment Summary – You are to submit the following

• 3 x reconstructed general ledger accounts
• Budgeted cash flow statement and report
• Budgeted Profit & Loss statement
• Overview report on future performance expectations

This project is due for submission on: _____________________________________________

ASSESSMENT 1 – ASSESSOR INSTRUCTIONS

This information is to be handed to each student to outline the assessment requirements

Each student has been given the following case study:

“The owner of Cupcake Heaven, Sarah Winter, needs some assistance in preparing her budget and budget reports. She has gone through her past records thoroughly and has prepared a summary of what has happened and what is expected to happen. However she is unsure how to determine cash receipts from debtors and cash payments from creditors. She has provided the following for your information

From balance sheet
	Actual 31 July 2017	Predicted 31 August 2017
	$	$
Balance of stock control	2600	36400
Balance of debtors control	2400	2800
Balance of creditors control	8600	9600
Balance of cash at bank	3210	?
From the profit and loss statement
	Actual 31 July 2017	Predicted 31 August 2017
Cash sales	6500	6600
Credit sales	2750	2800
Cost of sales	4500	4600
Stock loss	800	800
Wages	1600	1600
Office expenses	200	200
Discount expense	110	120
Discount revenue	150	160
Bad debts	100	100

1. Reconstruct the following general ledger accounts to help Sarah with the preparation of her budgeted cash flow statement. Debtors Control, Stock Control and Creditors Control. Don’t forget to allow for 10% GST on all sales and purchases.
2. Using the above information, plus your reconstructions from part a, prepare a budgeted cash flow statement for Cupcake Heaven for the month ending 31 August 2017.
3. Taking into consideration your budgeted cash flow statement from part b, comment on the likely future cash position of this business
4. Prepare a budgeted profit and loss for the month ending 31 August 2017.
5. Write a brief report on the future performance expectations of Cupcake Heaven in related to the expected profit or loss

Assessment Summary – You are to submit the following

• 3 x reconstructed general ledger accounts
• Budgeted cash flow statement and report
• Budgeted Profit & Loss statement
• Overview report on future performance expectations”

Assessors Notes:

• This assessment is a case study that focuses on the students ability to gather
  • appropriate information to prepare budgets
  • Prepare budgeted cash flow statements
  • Prepare budgeted profit and loss statements
  • Explain each prepared to their client
  • Provide comment on business performance in relation to expected profit and loss.
• No student self-assessment checklist has been provided with this assessment, as the students instructions provide clear guidance on what is expected to be completed and submitted.
• Sample answers are provided below. Please refer to these whist assessing each students submission

ASSESSMENT 1

1. Reconstruction of ledger accounts for August 2017

Debtors Control Account
Balance			Discount expense
Sales			Bad debts
GST			Cash at bank
Balance
Stock Control Account
Balance			Cost of sales
Creditors			Stock loss
			Balance
Balance
Creditors Control Account
Discount revenue			Balance
Cash at bank			Stock Control
Balance
			Balance

Budgeted Cash Flow Statement for month ending 31 August 2017

Cash flow from operating activities
Cash sales
Collections from debtors
GST collected
Payments to creditors
Wages
Office Expenses
GST paid
Cash provided (used) by operating activities
Net increase (decrease) by operating activities
Cash held at beginning of month
Cash held at end of month

3. The company’s cash position is expected to decrease in a dramatic fashion during August. The big problem is the expected increase in stock, which is expected to lead to a big jump in payments to creditors. The cash coming into the business from sales and debtors is well short of that required to pay suppliers. The owner will need to make arrangements to cover the anticipated shortfall in cash. Additional capital may have to be injected or an overdraft may have to be arranged

4. Budgeted Profit and Loss Statement for month ending 31 August 2017

	Revenue
	Cash sales
	Credit sales
Less	Cost of sales
		Gross Profit
Less	Stock loss
		Adjusted Gross Profit
Plus	Other revenue
	Discount revenue
Less	Expenses
	Wages
	Office expenses
	Discount expenses
	Bad debts
		Net profit

5. Although the future cash position of the business does not look bright, the profit performance or the business for August appears satisfaction. The difference between the two reports is that the budgeted cash flows include all the cash expected to be paid to the creditors. This is expected because the business is building up its stock levels for future trading. However, only the cost of goods actually sold is reported in the budgeted profit and loss statement. Therefore, this budget reports a positive result for August, despite the short fall of cash predicted in the budgeted statement of cash flows

This assessment is contextualised for the classroom

• Simulation is a form of evidence gathering that involves the candidate in completing or dealing with a task, activity or problem in an off-the-job situation that replicates the workplace context. Documented definitions state “Simulations vary from recreating realistic workplace situations such as in the use of flight simulators, through the creation of role plays based on workplace scenarios to the reconstruction of a business situation on a spreadsheet. In developing simulations, the emphasis is not so much on reproducing the external circumstance but on creating situations in which candidates are able to demonstrate:
  • technical skills (demonstrated through developing budgets)
  • underpinning knowledge (demonstrated through reconstructing ledger accounts)
  • generic skills such as decision making and problem solving (demonstrated through reconstructing ledger accounts)
  • workplace practices such as effective communication (demonstrated when explaining accounts)“

• In conducting training and assessment in a simulated workplace environment, trainers and assessors must make sure that the simulated environment gives the learner the opportunity to meet the following critical criteria:
  • Quality – The work is of the standard required for entry into the industry.
  • Productivity – The work is performed within a timeframe appropriate for entry to the industry.
  • Safety – The work is performed in a manner that meets industry safety standards.

• Each assessment has taken the following aspects into consideration, to ensure any simulations provide for integrated assessment of competence. This includes:
  • performing the task (task skills)
  • managing a number of tasks (task management skills)
  • dealing with workplace irregularities such as unexpected problems, breakdowns and changes in routine (contingency management skills)
  • fulfilling the responsibilities and expectations of the job and workplace, including working with others (job/role environment skills)
  • transferring competencies to new contexts.

• If a simulated workplace is used, it must allow for distractions such as background noises, ringing telephones, interruptions, etc. As this is a Hospitality based business unit, a simulated environment may also include an office environment with office equipment and computers. Each student must dress appropriately and professionally in line with workplace standards.

• For each assessment, you are not to interfere. In the event that the assessment is activities will impact on the safety of a student or bystander, the assessment must be stopped immediately

ASSESSMENT 1 – ASSESSOR CHECKLIST

This checklist is to be used when assessing the students in the associated task. This checklist is to be completed for each student. Please refer to separate mapping document for specific details relating to alignment of this task to the unit requirements.

Please complete below

Student Name:
Student ID No:
Date:

Did the student perform the following as per answers provided	Satisfactory
Part A – Accurately reconstruct the Debtors Control Ledger	 Yes  No
Part A – Accurately reconstruct the Stock Control Ledger	 Yes  No
Part A – Accurately reconstruct the Creditors Control Ledger	 Yes  No
Part A – Allow for GST	 Yes  No
Comment:
Part B – Provide an accurate budgeted cash flow statement	 Yes  No
Part B – identify negative cash held at end of month	 Yes  No
Comment:
Part C – Identify cash flow decrease in August	 Yes  No
Part C – Explain reason for cash flow decrease (increased stock and payments to creditors)	 Yes  No
Part C – Recommend arrangements to made for additional capital injection	 Yes  No
Comment:
Part D – Prepare accurate budgeted profit and loss statement for August	 Yes  No
Part D – Identify Gross Profit	 Yes  No
Part D – Identify Adjusted Gross Profit	 Yes  No
Part D – Identify Net Profit	 Yes  No
Comment:
Part E – Identify satisfactory profit performance for August	 Yes  No
Part E – Explain reason for difference in reports (creditor payments)	 Yes  No
Comment:
Ensure all calculations are accurate	 Yes  No
Provide clear explanations (easy to understand)	 Yes  No
Submit report on time	 Yes  No
Comment:

Result: Satisfactory | Not Satisfactory | Not Assessed

Student Declaration: I declare that I have been assessed in this unit, and I have been advised of my result. I have been advised of and am aware of my appeal rights.

Name: ________________________ Signature: ________________________ Date: ____/_____/_____

Assessor: I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I have provided appropriate feedback including the students appeal rights

Name: ________________________ Signature: ________________________ Date: ____/_____/_____

ASSESSMENT 2 – STUDENT INFORMATION

This information is to be handed to each student to outline the assessment requirements

Allan Smythe is the owner of Cakes-2-U, a specialist cake service that makes and delivers to wedding and celebratory cakes to customers. At the end of December 2016 there is only $260 in the company bank account. His other problem is that he would like to purchase a new vehicle (costing $25,000) for the business, but he doesn’t know when he will have the $10,000 deposit required. One of Smythes friends has advised him that he should prepare a forecast of his future transactions, but he is unsure how to do so. He has asked for your assistance and has provided the following information in relation to his business. (You do not have to account for the GST in this question).

• The quarter of January to March is Cakes-2-U’s busiest quarter each year. In January 2016 he earned the following revenue: January $12,000, February $14,000, and March $15,000. After this the business slowed down a little. In the next quarter he earned the following revenue. April, $14,000, May $12,000 and June $10,000. Allan is confident that revenue will be higher in the early part of 2017. He has already signed contracts to complete the following jobs in January 2017.

• Piketon’s $1,900
• Fox’s $1,750
• Tan’s $1,800
• Singh’s $1,950
• Strong’s $1,850
• Ablert’s $1,950
• O’Conner’s $1,900

• For the months of February and March, Allan expects to earn fees from about 10% higher than the previous year, but in the quarter April-June he doesn’t expect the same level of business. In fact, he has stated that he expects his revenue to be about 5% lower than in the same quarter last year
• Allan purchases all ingredients and materials for jobs as they are required. When he is quoting for a job, he calculates the cost of materials and multiplies this by 4 to calculate the total cost of the job. Allan argues that this allows for labour costs, vehicle expenses and a profit margin for himself. The cost of materials is therefore 25% of the revenue expected to be earned.
• The business employs 2 assistants who are each paid on Fridays. One is employed full time and is usually paid $500 per week. The other is employed on a casual basis. During the busiest months (January to March) the casual is probably paid around $500 per week. In the period April-June his wages will drop back to $400 per week.
• The company has one vehicle which delivers all orders. Petrol expenses for the vehicle are usually around #200 per month, but in the January-March quarter this will go up to about $240 per month. The vehicle is due for a service in February, and this will cost about $320
• Insurance on the vehicle is due on 2 March each year, and is expected to cost $640 this year. Registration of the vehicle is due on 11 June and should be about $540
• Allan advertises his business in the local papers at a cost of $150 per month
• New equipment will have to be purchased during February at a cost of $3,800. Allan has arranged for a credit arrangement to help with this purchase. The supplier has agreed to take a $1,000 deposit on delivery of the equipment, and then $400 payments will have to be paid each month until it is fully paid off
• Allan does his office work from home. He usually incurs office expenses for the business at around $100 per month
• Loan repayments of $1500 are due on 15 February, 15 May, 15 August and 15 November
• Allan usually redraws $500 each Friday for personal use

1. Prepare a cash budget for Cakes-2-U for the period January – June 2017. You budget should allow for the anticipated cash balance at the end of each month
2. Provide a written report that states when Allan will be able to afford the $10,000 deposit for the new vehicle. Support your answer with reasons
3. Arrange a time and present your budget to Allan (role-played by your assessor) and explain your proposed cash budget along with your recommendations. It is important that you have access to a soft-copy of your budget for this meeting

Note: When you present your budget and response, it is important that you are professional. This means you must ensure all documentation is presented professionally, and that you explain everything in detail. If Allan asks any questions, you are to answer them clearly and accurately

You are to present your work on: _____________________________________________

ASSESSMENT 2 – ASSESSOR INSTRUCTIONS

This information is to be handed to each student to outline the assessment requirements

Each student has been given the following case study:

“Allan Smythe is the owner of Cakes-2-U, a specialist cake service that makes and delivers to wedding and celebratory cakes to customers. At the end of December 2016 there is only $260 in the company bank account. His other problem is that he would like to purchase a new vehicle (costing $25,000) for the business, but he doesn’t know when he will have the $10,000 deposit required. One of Smythes friends has advised him that he should prepare a forecast of his future transactions, but he is unsure how to do so. He has asked for your assistance and has provided the following information in relation to his business. (You do not have to account for the GST in this question).

• The quarter of January to March is Cakes-2-U’s busiest quarter each year. In January 2016 he earned the following revenue: January $12,000, February $14,000, and March $15,000. After this the business slowed down a little. In the next quarter he earned the following revenue. April, $14,000, May $12,000 and June $10,000. Allan is confident that revenue will be higher in the early part of 2017. He has already signed contracts to complete the following jobs in January 2017.

• Piketon’s $1,900
• Fox’s $1,750
• Tan’s $1,800
• Singh’s $1,950
• Strong’s $1,850
• Ablert’s $1,950
• O’Conner’s $1,900

• For the months of February and March, Allan expects to earn fees from about 10% higher than the previous year, but in the quarter April-June he doesn’t expect the same level of business. In fact, he has stated that he expects his revenue to be about 5% lower than in the same quarter last year
• Allan purchases all ingredients and materials for jobs as they are required. When he is quoting for a job, he calculates the cost of materials and multiplies this by 4 to calculate the total cost of the job. Allan argues that this allows for labour costs, vehicle expenses and a profit margin for himself. The cost of materials is therefore 25% of the revenue expected to be earned.
• The business employs 2 assistants who are each paid on Fridays. One is employed full time and is usually paid $50 per week. The other is employed on a casual basis. During the busiest months (January to March) the casual is probably paid around $500 per week. In the period April-June his wages will drop back to $400 per week.
• The company has one vehicle which delivers all orders. Petrol expenses for the vehicle are usually around #200 per month, but in the January-March quarter this will go up to about $240 per month. The vehicle is due for a service in February, and this will cost about $320
• Insurance on the vehicle is due on 2 March each year, and is expected to cost $640 this year. Registration of the vehicle is due on 11 June and should be about $540
• Allan advertises his business in the local papers at a cost of $150 per month
• New equipment will have to be purchased during February at a cost of $3,800. Allan has arranged for a credit arrangement to help with this purchase. The supplier has agreed to take a $1,000 deposit on delivery of the equipment, and then $400 payments will have to be paid each month until it is fully paid off
• Allan does his office work from home. He usually incurs office expenses for the business at around $100 per month
• Loan repayments of $1500 are due on 15 February, 15 May, 15 August and 15 November
• Allan usually redraws $500 each Friday for personal use

1. Prepare a cash budget for Cakes-2-U for the period January – June 2017. You budget should allow for the anticipated cash balance at the end of each month
2. Provide a written report that states when Allan will be able to afford the $10,000 deposit for the new vehicle. Support your answer with reasons
3. Arrange a time and present your budget to Allan (role-played by your assessor) and explain your proposed cash budget along with your recommendations. It is important that you have access to a soft-copy of your budget for this meeting

Note: When you present your budget and response, it is important that you are professional. This means you must ensure all documentation is presented professionally, and that you explain everything in detail. If Allan asks any questions, you are to answer them clearly and accurately”

Assessors Notes:

• This assessment is a case study that focuses on the students ability to:
  • Gather appropriate information to prepare budgets
  • Prepare a cash budgets
  • Explain cash budget and answer customers questions
  • Consider changes that may affect cash budget
  • Modify budget and make recommendations on viability of modifications
• No student self-assessment checklist has been provided with this assessment, as the students instructions provide clear guidance on what is expected to be completed and submitted.
• The student is required to present their work to you (the client) as part of this assessment. When role-playing the client you are to allow the student to explain their cash budget and recommendations themselves. If the student presents irregularities in their budget, you are to question them. (A sample completed cash budget is provided below)
• Note: in 2017 there are 4 pay days in each month, with the exception of March and June , where there are 5 Fridays, and therefore 5 pay days:

• After the student has presented their budget, you are to explain the following:
  • You have had second thoughts about the expected downturn in business in the April-June period. You are considering a new advertising strategy that will cost him $100 more each month (for April – June) but are expected to increase his revenue during these months by 8%. However this will increase the wages by $150 per week and, of course, the extra jobs will cause an increase in the amount of materials that would be used.
  • Ask the student to redraft the budget and take note of the changes in the estimated bank balances. Ask the student if you should go ahead with this advertising plan and the reasons for their answer.
• The student will need to go and re-work the budget before responding to your question. You are to allow a short period of time for this to occur (up to 1 hour), but realistically it should only take a student a maximum of 30 minutes to respond appropriately.
• By asking your student to work this out immediately, it allows the student to demonstrate their ability to meet appropriate deadlines and also reduces the risk of the student copying their answer from others. This modification extension helps demonstrate authenticity, as the student will need to re-work their figures

• Sample answers are provided overleaf. Please refer to these whist assessing each students submission

ASSESSMENT 2

Cash budget for 6 months ending 30 June 2017
	Jan $	Feb $	Mar $	Apr $	May $	Jun $
Estimated receipts
Fees
Total receipts
Estimated payments
Materials
Wages
Petrol
Service of delivery vehicle
Insurance of delivery vehicle
Registration of delivery vehicle
Advertising
Purchase of equipment
Office expenses
Loan repayments
Drawings
Total payments
Excess (deficit) for month
Bank balance at start of month
Bank balance at end of month

2. The earliest he should buy the new vehicle is in April. This leaves him with a safety margin of about $1,800. If Smythe has doubts about this he should delay the purchase until May. As the business expects to have a negative cash flow in June, Smythe may well hold off on his decision so that the next quarterly budget can be prepared. The fact that the cash position is expected to drop back to around $10,000 by the end of June is a warning that the business may not be able to go ahead with the purchase of the new vehicle. It should be kept in mind that, once the deposit of $10,000 has been paid, another $15,000 still has to be paid in the future. This would put the cash resources of this business under intense pressure.

Revised cash budget for 6 months ending 30 June 2017
	Jan $	Feb $	Mar $	Apr $	May $	Jun $
Estimated receipts
Fees
Total receipts
Estimated payments
Materials
Wages
Petrol
Service of delivery vehicle
Insurance of delivery vehicle
Registration of delivery vehicle
Advertising
Purchase of equipment
Office expenses
Loan repayments
Drawings
Total payments
Excess (deficit) for month
Bank balance at start of month
Bank balance at end of month

4. Comment: At first glance the new advertising strategy appears to be worthwhile. The predicted cash balance for April increases from $11,855 to $11,953 (increase of $98). In May the change is from $12,255 to $12,337 (increase of $82). However, in June the change is a negative result. Rather than the expected balance of $10,740, the reviewed budget predicts a balance of $10,542, a reduction of $198. This negative change is the result of the increase in wages and the fact that in June there are 5 pay days. The increase of $150 per week leads to an expected increase in wages for June of $750 ($150 x 5). This payment eliminates any gains made in the area of revenue and therefore the advertising plan should not be adopted. An alternative point of view is that the plan should be adopted because it generates an increase in the market share for the business. The new advertising is expected to generate new work, meaning that new opportunities will be created for ‘word of mouth’ advertising. As long as customer satisfaction is high, it may well be that the new plan is just what the business needs in the slower months of the year. This may well lead to a very busy period in the following months! It is valid to argue that for around $200 (the net change in the budget) the business may, in the long run, receive benefits outweighing this cost.

This assessment is contextualised for the classroom

4. Simulation is a form of evidence gathering that involves the candidate in completing or dealing with a task, activity or problem in an off-the-job situation that replicates the workplace context. Documented definitions state “Simulations vary from recreating realistic workplace situations such as in the use of flight simulators, through the creation of role plays based on workplace scenarios to the reconstruction of a business situation on a spreadsheet. In developing simulations, the emphasis is not so much on reproducing the external circumstance but on creating situations in which candidates are able to demonstrate:
   1. technical skills (demonstrated through developing budgets)
   2. underpinning knowledge (demonstrated through reconstructing ledger accounts)
   3. generic skills such as decision making and problem solving (demonstrated through reconstructing ledger accounts)
   4. workplace practices such as effective communication (demonstrated when explaining accounts)“

4. In conducting training and assessment in a simulated workplace environment, trainers and assessors must make sure that the simulated environment gives the learner the opportunity to meet the following critical criteria:
   1. Quality – The work is of the standard required for entry into the industry.
   2. Productivity – The work is performed within a timeframe appropriate for entry to the industry.
   3. Safety – The work is performed in a manner that meets industry safety standards.

4. Each assessment has taken the following aspects into consideration, to ensure any simulations provide for integrated assessment of competence. This includes:
   1. performing the task (task skills)
   2. managing a number of tasks (task management skills)
   3. dealing with workplace irregularities such as unexpected problems, breakdowns and changes in routine (contingency management skills)
   4. fulfilling the responsibilities and expectations of the job and workplace, including working with others (job/role environment skills)
   5. transferring competencies to new contexts

4. If a simulated workplace is used, it must allow for distractions such as background noises, ringing telephones, interruptions, etc. As this is a Hospitality based business unit, a simulated environment may also include an office environment with office equipment and computers. Each student must dress appropriately and professionally in line with workplace standards.

4. For each assessment, you are not to interfere. In the event that the assessment is activities will impact on the safety of a student or bystander, the assessment must be stopped immediately

ASSESSMENT 2 – ASSESSOR CHECKLIST

This checklist is to be used when assessing the students in the associated task. This checklist is to be completed for each student. Please refer to separate mapping document for specific details relating to alignment of this task to the unit requirements.

Please complete below

Student Name:
Student ID No:
Date:

Did the student perform the following as per answers provided	Satisfactory
Part A – Develop a cash budget for Jan-Jun 2015 that is
Accurate (refer sample answer provided)	 Yes  No
Recognises that there are 5 paydays in March and June	 Yes  No
Includes all estimated receipts and all estimated payments (refer sample answer provided)	 Yes  No
Comment:
Part B – Provide a recommendation that
Identifies April as the appropriate month to purchase	 Yes  No
Identifies the safety margin of about $1800	 Yes  No
Identifies the cash flow drop in June which may place strain on the business	 Yes  No
Identifies that after the $10,000 is paid, another $15,000 must also be paid in the future, which will place immense pressure on the business	 Yes  No
Comment:
Part C – Arrange a time to meet with the assessor and
Present budget professionally (easy to read, accurate, etc.)	 Yes  No
Clearly explain the budget	 Yes  No
Highlight the proposed excess or deficits per month	 Yes  No
Highlight the bank balance at the end of each month	 Yes  No
Demonstrate that they understood their figures (by knowing what they are talking about)	 Yes  No
Listen to Allan’s opinion (as outlined in Assessor Instructions)	 Yes  No
Advise Allan that they will need to revisit the figures before providing an answer (not guess or make an immediate answer without running and checking the figures)	 Yes  No
Comment:
Part D – Review the budget:
Consider the new details provided by the client	 Yes  No
Adjust the budget reflecting the changes	 Yes  No
Provide an accurate reviewed budget	 Yes  No
Identify the negative result in June	 Yes  No
Identify the cause for the loss (additional pay days, which eliminates any gains)	 Yes  No
Make a recommendation that is supported by fact (refer to sample recommendation provided in Assessors Instructions – Answers Section)	 Yes  No
Initial budget attached	 Yes  No
Written recommendations for new vehicle attached	 Yes  No
Updated budget attached	 Yes  No
Recommendation attached	 Yes  No
Comment:

Result: Satisfactory | Not Satisfactory | Not Assessed

Student Declaration: I declare that I have been assessed in this unit, and I have been advised of my result. I have been advised of and am aware of my appeal rights.

Name: ________________________ Signature: ________________________ Date: ____/_____/_____

Assessor: I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I have provided appropriate feedback including the students appeal rights

Name: ________________________ Signature: ________________________ Date: ____/_____/_____

ASSESSMENT 3 – STUDENT INFORMATION

This information is to be handed to each student to outline the assessment requirements

PART 1: The following comparison of budgeted cash flow and actual cash flows has been prepared for Donna’s Diner for the quarter ending 30 September 2017

	Budget $	Actual $
Receipts
Cash fees	24000	32000
Collections from debtors	12000	14500
Loan from ABC Finance Company	5000
GST Collected	2400	3200
Payments
Wages	6000	6500
Insurance	800	840
Suppliers	14000	16400
Postage and telephone	400	380
Purchase of new equipment	5000	4600
Cleaning of shop	1200	1200
Drawings	4500	3800
GST Paid	2140	2342

The business had $500 in the bank on 1 July 2017

1. Prepare a budget variance report for the quarter ended 30 September 2017 to reveal the significant differences between the budgeted and actual data
2. What was the predicted cash balance on 30 September?
3. What was the actual cash balance on 30 September?
4. State, and explain, the major causes of the difference between the budgeted and actual bank balance
5. Do you think that the quarterly period is appropriate for cash budgeting? Give reasons for your answer

You are to present your work on: _____________________________________________

PART 2: Following from Part A, you are to arrange a time to talk with your assessor (who will role-play the manager for Donna’s Diner) and identify the possible cause for any unfavourable variances. You are to take into consideration the information you obtain, and then develop a projected cash flow budget for the next 1 month.

Prior to meeting with the supervisor it is important that you are prepared. This means you must know what you need to ask, as you will need this information to complete the next cash flow budget.

After meeting with your assessor, you are to develop a cash flow budget (for October 2017), and submit it along with a written report outlining the variations made and reasons.

This assessment is due on: ___________________________________________

ASSESSMENT 3 – ASSESSOR INSTRUCTIONS

This information is to be handed to each student to outline the assessment requirements

Each student has been given the following case study:

“Part 1: The following comparison of budgeted cash flow and actual cash flows has been prepared for Donna’s Diner for the quarter ending 30 September 2017

	Budget $	Actual $
Receipts
Cash fees	24000	32000
Collections from debtors	12000	14500
Loan from ABC Finance Company	5000
GST Collected	2400	3200
Payments
Wages	6000	6500
Insurance	800	840
Suppliers	14000	16400
Postage and telephone	400	380
Purchase of new equipment	5000	4600
Cleaning of shop	1200	1200
Drawings	4500	3800
GST Paid	2140	2342

The business had $500 in the bank on 1 July 2017

1. Prepare a budget variance report for the quarter ended 30 September 2017 to reveal the significant differences between the budgeted and actual data
2. What was the predicted cash balance on 30 September?
3. What was the actual cash balance on 30 September?
4. State, and explain, the major causes of the difference between the budgeted and actual bank balance
5. Do you think that the quarterly period is appropriate for cash budgeting? Give reasons for your answer

PART 2: Following from Part A, you are to arrange a time to talk with your assessor (who will role-play the manager for Donna’s Diner) and identify the possible cause for any unfavourable variances. You are to take into consideration the information you obtain, and then develop a projected cash flow budget for the next 1 month.

Prior to meeting with the supervisor it is important that you are prepared. This means you must know what you need to ask, as you will need this information to complete the next cash flow budget.

After meeting with your assessor, you are to develop the cash flow budget (for October 2017), and submit it along with a written report outlining the variations made and reasons.”

Assessors Notes:

• This assessment is a case study that focuses on the students ability to:
  • Monitor the effectiveness of budgets
  • Identify variances in budgets
  • Explain variances in budgets clearly and accurately
• No student self-assessment checklist has been provided with this assessment, as the students instructions provide clear guidance on what is expected to be completed and submitted.
• Part 1 requires no interaction with the student, as all required information is included in the Student Information Form
• Part 2: The student is required to present their work to you (the client) as part of this assessment. When role-playing the client you are to allow the student to present their cash flow budget and answer any questions relating to unfavourable variances. If the student presents irregularities in their budget, you are to question them. It is important that you only answer questions asked by the student during this conversation and not lead them in any way.
• Part 2: Reasons for variations are as follows
  • Cash Fees (expected to continue – Ongoing catering job of $1,300 only commenced in September) ($32000 – $1300 = $30700 / 3 = $10233 + $1300 = $11533
  • Loan from ABC company – did not apply due to increased sales and debtor collections
  • Wages – Overtime was payable due to a catering job that was picked up in September. This catering job is ongoing, and is worth $1,300 per month (which results in an increase of COGS of $340 and increase of wages of $500). Note the catering job only accounts for 1 month in budget variance quarter
  • Suppliers – additional ingredients required due to increase in sales (ongoing). Note the catering job only accounts for 1 month in budget variance quarter
  • Insurance – premium increase due to change in fire levy
  • Drawings – this is not ongoing and will revert to $1500 per month
  • GST – direct result of increased sales
• Sample answers are provided overleaf. Please refer to these whist assessing each students submission

ASSESSMENT 3

budget variance report for quarter ended 30 September 2010
	Budget $	Actual $	Variance
$	%	F or U
Receipts
Cash fees
Collections from debtors
Loan from ABC Finance Company
GST Collected
Total Receipts
Payments
Wages
Insurance
Suppliers
Postage and telephone
Purchase of new equipment
Cleaning of shop
Drawings
GST Paid
Total payments
Excess of receipts over payments
Bank balance as at 1 Jul 2017
Bank balance as at 30 Sep 2017

2. Predicted cash balance was $9,860
3. Actual cash balance was $14,138
4. Major reasons for difference:
   1. Receipts: Cash sales were $8,000 above budget. Collections from debtors were $2,500 higher than expected. These unexpected results probably made the loan of $5,000 unnecessary. (Note: although the loan is listed as an unfavourable variance, it would probably be viewed as a positive result!)
   2. Payments: Outflows to suppliers were $2,400 over budget. This may have been due to the higher levels of fees (more business leads to higher purchases of materials). Drawings were 16% below budget. The equipment was purchased at a much better price than was expected and helped the firm achieve the pleasing result.
5. A monthly budget period is usually preferred to a quarterly budget. The problem with a quarterly period is that shortages may occur in some months before a recovery occurs within the quarter. A quarterly budget does not reveal the full month-by-month picture and may therefore not show that liquidity problems may be forthcoming

Part B – Cash Flow Budget – October 2017

	Budget $
Receipts
Cash fees
Collections from debtors
GST Collected
Total Receipts
Payments
Wages
Insurance
Suppliers
Postage and telephone
Purchase of new equipment
Cleaning of shop
Drawings
GST Paid
Total Payments
Excess of receipts over payments

This assessment is contextualised for the classroom

4. Simulation is a form of evidence gathering that involves the candidate in completing or dealing with a task, activity or problem in an off-the-job situation that replicates the workplace context. Documented definitions state “Simulations vary from recreating realistic workplace situations such as in the use of flight simulators, through the creation of role plays based on workplace scenarios to the reconstruction of a business situation on a spreadsheet. In developing simulations, the emphasis is not so much on reproducing the external circumstance but on creating situations in which candidates are able to demonstrate:
   1. technical skills (demonstrated through developing budgets)
   2. underpinning knowledge (demonstrated through reconstructing ledger accounts)
   3. generic skills such as decision making and problem solving (demonstrated through reconstructing ledger accounts)
   4. workplace practices such as effective communication (demonstrated when explaining accounts)“

4. In conducting training and assessment in a simulated workplace environment, trainers and assessors must make sure that the simulated environment gives the learner the opportunity to meet the following critical criteria:
   1. Quality – The work is of the standard required for entry into the industry.
   2. Productivity – The work is performed within a timeframe appropriate for entry to the industry.
   3. Safety – The work is performed in a manner that meets industry safety standards.

4. Each assessment has taken the following aspects into consideration, to ensure any simulations provide for integrated assessment of competence. This includes:
   1. performing the task (task skills)
   2. managing a number of tasks (task management skills)
   3. dealing with workplace irregularities such as unexpected problems, breakdowns and changes in routine (contingency management skills)
   4. fulfilling the responsibilities and expectations of the job and workplace, including working with others (job/role environment skills)
   5. transferring competencies to new contexts

4. If a simulated workplace is used, it must allow for distractions such as background noises, ringing telephones, interruptions, etc. As this is a Hospitality based business unit, a simulated environment may also include an office environment with office equipment and computers. Each student must dress appropriately and professionally in line with workplace standards.

4. For each assessment, you are not to interfere. In the event that the assessment is activities will impact on the safety of a student or bystander, the assessment must be stopped immediately

ASSESSMENT 3 – ASSESSOR CHECKLIST

This checklist is to be used when assessing the students in the associated task. This checklist is to be completed for each student. Please refer to separate mapping document for specific details relating to alignment of this task to the unit requirements.

Please complete below

Student Name:
Student ID No:
Date:

Did the student perform the following as per answers provided	Satisfactory
Part A – Develop a budget variance report that
Is accurate (refer sample answer provided)	 Yes  No
Shows variance in $ format	 Yes  No
Shows variance in % format	 Yes  No
Indicate if each variance is Favourable (F) or Unfavourable (U)	 Yes  No
Comment: (assessor must complete)
Part B – Identify predicted cash balance of $9,860	 Yes  No
Comment: (assessor must complete)
Part C – Calculate cash balance for $14,138	 Yes  No
Comment: (assessor must complete)
Part D – Identify reasons for variances including
Cash sales $8000 above budget
Debtor collections $2,500 than expected
Above results probably made the loan unnecessary
Payments to suppliers $2,400 over budget – possibly due to higher sales resulting in higher cost of goods sold
Drawings 16% below budget
Equipment purchased at a better price than anticipated
Comment: (assessor must complete)
Part E – Provide a recommendation that
Recommend monthly budget over quarterly	 Yes  No
Quarterly does not review full month by month figures	 Yes  No
Quarterly may not identify liquidity problems forthcoming	 Yes  No
Comment: (assessor must complete)
Part F – Arrange a time to meet with the assessor and
Present budget professionally (easy to read, accurate, etc.)	 Yes  No
Clearly explain the budget	 Yes  No
Highlight and explain the favourable variances	 Yes  No
Highlight and explain the unfavourable variances	 Yes  No
Demonstrate that they understood their figures (by knowing what they are talking about)	 Yes  No
Comment: (assessor must complete)
Ask questions to determine	 Yes  No
Reasons for each unfavourable variance	 Yes  No
Reasons for significant favourable variances	 Yes  No
If variances are ongoing or once-off	 Yes  No
Any significant changes	 Yes  No
Comment: (assessor must complete)
Review information received and develop cash flow budget for October that:	 Yes  No
Is based on the actual figures provided (3 monthly divided by 3)	 Yes  No
Takes into consideration increased receipts from ongoing monthly catering job	 Yes  No
Takes into consideration increased wages as a result of ongoing monthly catering job	 Yes  No
Takes into consideration increased COGS as a result of ongoing monthly catering job	 Yes  No
Removes requirement for Loan	 Yes  No
Keeps drawings at $1500	 Yes  No
Comment: (assessor must complete)
October Cash Flow Statement reflects sample cash flow statement provided	 Yes  No
Budget variance report attached	 Yes  No
Predicted cash balance attached	 Yes  No
Actual cash balance attached	 Yes  No
Report outlining probably variance reasons attached	 Yes  No
Answer re: Quarterly vs Monthly budgets attached	 Yes  No
Cash Flow Budget (October) attached	 Yes  No
Comment: (assessor must complete)

Result: Satisfactory | Not Satisfactory | Not Assessed

Student Declaration: I declare that I have been assessed in this unit, and I have been advised of my result. I have been advised of and am aware of my appeal rights.

Name: ________________________ Signature: ________________________ Date: ____/_____/_____

Assessor: I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I have provided appropriate feedback including the students appeal rights

Name: ________________________ Signature: ________________________ Date: ____/_____/_____

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