Learners Assessment Guide

SITXFIN004 Prepare and monitor budgets

Assessment 2

Assignment Coversheet

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Assessment Information

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SITXFIN004 Prepare and monitor budgets

Assessment 2 – Project

At the end of the last financial year 2020 – 2021 The Academia Resort had the following profit and loss statement.

Instructions: Your Task

This assessment is in THREE parts:

Part A is to calculate a budget based on the following information of Academia Resort for the next calendar year 2022 – 2023 that meets the specific business needs. Check Moodle announcement for submission due dates. Please see the data below.

Demonstrate the following when preparing the budget and report:

Consultation on budget components

Analysis of factors that impact on the budget

Completion of draft and final versions of budget within designated timelines

Monitor and review the above budget against performance over its life cycle.

Revenue	2020 – 2021 Budget $
Food	223,000
Beverage	71,000
Accommodation	437,000
		731,000
Cost of Sales (COGS)
Food	53,750 (25%)
Beverage	22,950 (30%)
Accommodation	88,300 (20%)
Total Cost of Sales (COGS)		165,000
Gross Profit		566,000
Operating Expenses
Wages	179,500
Operating supplies	36,500
Administration	19,000
Advertising	34,000
Maintenance	22,000
Utilities	31,100
Depreciation	10,200
Interest	18,500
Total Other Expenses		350,800
Net profit before tax		215,200

Academia Resort anticipates the following changes in the business environment:

Management expects an increase in interest rates of 0.25% per quarter.

Fall in room patronage of 12%.

The guests will be willing to spend more per head if the staff up sells successfully – management expects a 20% increase in both food and beverage average sales.

Room revenue is based on the following calculation:

Room rate is $120.00 per day. These rooms are all twins.

The Resort has 7,270 guests a year and all food and beverage revenue come from these guests.

Staff wages represent 25% of total revenue and management decided that in order to ensure good service this percentage must remain the same.

CALCULATE IN THE TABLE BELOW THE NEW BUDGET BASED ON THE PROJECTED CHANGES.

	2021 – 2022 Current Budget	2022 – 2023 Budget $
Revenue	$	$
Food	223,000
Beverage	71,000
Accommodation	437,000
Total Revenue	731,000
Cost of Sales
Food	53,750 (25%)
Beverage	22,950 (30%)
Accommodation	88,300 (20%)
Total COGS	165,000
Gross Profit	566,000
Operating Expenses
Wages	179,500
Operating supplies	36,500
Administration	19,000
Advertising	34,000
Maintenance	22,000
Utilities	31,000
Depreciation	10,200
Interest	18,500
Total Operating Expenses	350,800
Net profit before tax	215,200

Part B.

Create a short report and explain:

Q1. How would you Investigate and take appropriate action on significant deviations and variances? Who would you consult with?

Q2. How can you regularly review the budget to assess actual performance against estimated performance?

Q3. What is the importance of preparing accurate financial reports?

Q4. How can you monitor and review the above budget against performance over its life cycle?

Part C.

After producing the new budget, you are required to calculate the variance, percentage change and also prepare another budget that allows for a profit of 28%.

		2021 – 2022	2022 – 2023	Variance	% Change	Profit Increase to 28%
	Current Budget		With cost increases
Revenue		$	$	$		$
Food		223,000
Beverage		71,000
Accommodation		437,000
Total Revenue		731,000
Cost of Sales		$	$	$		$
Food (25%)		53,750
Beverage (30%)		22,950
Accommodation (20%)		88,300
Total COGS		165,000
Gross Profit		566,000
Operating Expenses		$	$	$		$
Wages		179,500
Operating supplies		36,500
Administration		19,000
Advertising		34,000
Maintenance		22,000
Utilities		31,100
Depreciation		10,200
Interest		18,500
Total Operating Costs		350,800
Net profit before tax		215,200
					28% Increase in profit

Marking Guide

Assessment 2 – Project	Not Attempted	Not Satisfactory	Satisfactory	Excellent	Comments
	0	1	2	3
SITXFIN004 Prepare and monitor budgets
1.Report prepared in a professional manner
2.Student identifies consultation requirements in budget preparation
3.Student identifies and analyses factors that could impact the budget
4. Student prepares a clear budget based on the provided information in excel template.
5. Investigate budget and take appropriate action on significant deviations.
6. Monitor and review the above budget against performance.
7. Calculate the variance, percentage change and also prepare another budget that allows for a profit of 28%.
8. identifies the importance of preparing accurate financial reports.
Total Marks out of 24

Student is satisfactory for this assessment task: Yes Not Yet

________________________________ ___ / ___ / _____

Trainer’s Signature Date