Assessment 2 Budget Project

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Assessment 2 Budget Project

Scenario:

You are the General Manager at The Restaurant QAT at a Newmarket hotel, and you are meeting the Head Chef to discuss the financial quarterly budget (April – June)

The previous budge /actuals from Jan – Mar (below) has been given to you, with the March totals yet to be entered.

The financial controllers are expecting an increase of the January – March budget of 10% which is the increase that is expected in business and this increase percentage is to be the same for April to June budget.

However, they are not aware of certain issues or circumstances regarding operations and you are to provide a memo to the financial controllers and the Head Chef regarding these issues.

The issues are as follows;

• Due to the weather the hotel occupancy bookings for the months of April – June is less 10% from last year, as it is colder than previous years,
• The hotel is upgrading 15 rooms out of 50 so this will also impact on the occupancy rates as these renovations will take place in the April to June period.
• As winter approaches some suppliers have indicated that their vegetable prices will increase,
• There are 25% less conference bookings over the next three months, however two weddings have been booked in, with each wedding being 100 persons attending.
• A new hotel (67 rooms) is due to open up in June, which has two restaurants opening up inside at the same time and they have opening specials in the first week of June.

X

You tasks:

1. Consult with the head-chef on the changes to be included in the next budget and write a memo of the details and analysis of the factors that may impact on the particular budget, stating what areas may be affected and to what extent.

Detailed written memo: Students, please note: Examples may include: Increase in wages for staff is required due to a conference or function that is occurring in the months, and any other areas that need to be addressed. The monthly figures may need to increase or decrease due to these changes which you will need to make clear of why the changes. Also state an estimated percentage change that you think may be more practical.

Trainer Use Only Successful ☐ Unsuccessful ☐ Trainer feedback only if not satisfactory: Click or tap here to enter text.

2. Following your consultation, you are required to complete a draft budget which reflects the details you have provided in your memo and allowing for a decrease the percentage that you have decided on and present it to your trainer for feedback

Restaurant Draft Budget	April	%	May	%	June	%
Total Revenue	$	100.0	$	100.0	$	100.0
Total Food Revenue	$		$		$
Total Beverage Revenue	$		$		$
Cost of Sales Food	$		$		$
Cost of Sales Beverage	$		$		$
Salaries & Wages – Preparation	$		$		$
Salaries & Wages – Service	$		$		$
Gross Profit on Sales	$		$		$

3. Provided the details of feedback and changes that were requested.

Fill the table below

Feedback / Reasons for changes	Adjustments	Final decision
Examples may include: season change, competitor opening up etc.	Student is to provide the reasonable amount of adjustment Example: percentage reduction etc.	This will need to be demonstrated with the student to ascertain their understanding of negotiation with financial controllers (Verbal discussion)

4. The financial controllers and the Head Chef have agreed to most of the proposed changes except the May budget, they are wanting an 8.5% increase in Total Revenue.

Based on the final decisions received, complete the final budget.

Restaurant Final Budget	April	%	May	%	June	%
Total Revenue	$	100.0	$	100.0	$	100.0
Total Food Revenue	$		$		$
Total Beverage Revenue	$		$		$
Cost of Sales Food	$		$		$
Cost of Sales Beverage	$		$		$
Salaries & Wages – Preparation	$		$		$
Salaries & Wages – Service	$		$		$
Gross Profit on Sales	$		$		$

5. Monitor the budget against the actual budget monthly

After the budget has been finalised and the three months is up, the final figures have beenreleased.

Using your figures of your final budget, compare the budget vs actuals and provide your findings in the table below.

Restaurant Final Budget	April	%	Budget	May	%	Budget	June	%	Budget
Total Revenue	$167,000	100		$170,539	100		$173,607	100
Total Food Revenue	$144,097			$146,047			$
Total Beverage Revenue	$23,793			$24,493			$
Cost of Sales Food	$55,045			$52,138			$55,373
Cost of Sales Beverage	$5,948			$6,123			$5,987
Salaries & Wages – Preparation	$19,545			$21,555			$18,818
Salaries & Wages – Service	$37,609			$39,325			$35,398
Gross Profit on Sales	$			$			$

Month	Budgeted figures	Actual figures	Findings/Reasons	Variance (Favourable or Unfavourable)

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6. Each change actioned taken as a result of underperformance (unfavourable) must be documented in the log below

Log:

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7. On completion of the budget cycle, provide a summary report for the budget performance. What are your recommendations for the next cycle based on your monitoring and reviews?

Including any changes that need to be made and why

Recommendations:

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