62500 – Assessment Tasks and InstructionsDateUnit of Competency

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Assessment and of and Code SITXFIN004 Prepare and monitor budgetsStudent NameStudent NumberTrainer/AssessorAssessment for this Unit Please Tick DetailsAssessment 1 AssignmentAssessment 2 AssignmentAssessment 3 AssignmentStatement of AuthenticityI 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 assessmentStudent Signature: Date: / /20Assessment 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 budgetso whole of organisation budgets• budget terminology• specific industry sector and organisation:o role and nature of budgetso budget formats, budget performance and financial reports o financial reporting procedures and cycleso features and functions of software programs used to prepare and monitor budgets• internal and external factors that impact on budget development:o growth or decline in economic conditionso human resource requirements o new legislation or regulationo 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 customer or supplier researchdeclared 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 periodso techniques for making budget estimates o common reasons for deviations and budget deviation management.Instructions for assessment including WHS requirementsAnswer 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 1Your 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.Response1.2.3.4.2. Describe how the following sources of data can be used for budget preparation.ResponseCompetitor 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.ResponseManagement 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.ResponseLegislation 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?Response6. What does the process of preparing a draft budget usually involve?Response7. How does breaking the budget down into groups, departments, or income and expense categories help colleagues?Response8. Name 3 people (job roles) you would circulate the draft budget to for feedback or approval:Response1.2.3.9. The budgeting process requires strong negotiation skills. Why is it important to convince staff of the achievability of the budget?Response10. 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:Response11. In most businesses/industries, when must the budget be complete?Response12. What information should department managers include in their monthly reports?Response13. How often should the budget be compared to the actual accounting results?Response14. Name and describe 5 financial reports you might generate from your accounting system to check your budget against actual income or expenditure.Response1.2.3.4.5.15. Every revenue and expense item on the Profit and Loss Statement should be compared to what?Response16. When revenue variances occur, why is talking to staff a good way to help identify and find options to address the issue?Response17. List 3 factors that can cause variances in staff budgets.Response1.2.3.18. Why is monitoring your budget progressively throughout the year so important?Response19. How can you collect information to help create future budget plans?Response20. Name an accounting program you can use to help manage budgets.Response21. Explain each of the following types of budgets:ResponseCash budget/Cashflow budget –Departmental budget –Event budget –Project budget –Purchasing budget –Vanshraj Enterprises P/l Trading As Victorian Academy Of Commerce and Technology StartupsRTO No. 41428 CRICOS Provider Code 03477E email: vactsedu@gmail.com171 Sydney Road,Coburg-3058VACTS Ver 1.4 June 2020Sales budget –Wage budget –Master budget –Assessment 2 GuidelinesWhat will be assessedPerformance EvidenceThe 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 componentso analysis of factors that impact on the budgeto completion of draft and final versions of budget within designated timelinesKnowledge 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 budgetso whole of organisation budgets• budget terminology• specific industry sector and organisation:o role and nature of budgetso budget formats, budget performance and financial reports o financial reporting procedures and cycleso 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 conditionso human resource requirements o new legislation or regulationo 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 researchcustomer 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 periodso techniques for making budget estimates o common reasons for deviations and budget deviation management.Resource RequirementsComputer with Microsoft excel Calculator Spread Sheets:“Task 1-Hotel VACTS Budget_Forecast”“Task 2-Budget VACTS_Restaurant_Bar”Instructions for assessment including WHS requirementsThe assignment for Assessment 2 consists of 3 TasksTask 1Requires 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 2Requires you to prepare a final budget, based on the changes made to your draft budget following a management meeting.Task 3Requires 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 2Task 1Your 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 menusb. The beverage revenue will increase by 8%.c. Staff costs need to be adjusted to 44% of the food budget.Total Catering Revenue $4,264,241.52Forecast$ Forecast %Food Budget Expenses AnalysisTotal Revenue $2,019,370.53 47% COGS $601,944.02 30%Food Revenue $1,740,112.81 86% 15% Staff costs $1,122,433.24 56%Beverage Revenue $279,257.72 14% 8% Other Expenses $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 2Your 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.&BarMonth Customer numbers Average Spend (Food) Average Spend (Beverage)January 1850 $ 45.00 $ 9.70February 2000 $ 37.00 $ 9.70March 700 $ 42.00 $ 9.70April 1200 $ 48.00 $ 9.70May 1200 $ 36.50 $ 9.70June 600 $ 35.00 $ 9.70July 950 $ 34.00 $ 9.70August 800 $ 38.00 $ 9.70September 900 $ 29.00 $ 9.70October 650 $ 29.50 $ 9.70November 980 $ 35.50 $ 9.70December 2200 $ 48.00 $ 9.701. 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 RevenueJanuary 1850 $45.00 $ 83,250.00February 2000 $37.00March 700 $42.00April 1200 $48.00May 1200 $36.50June 600 $35.00July 950 $34.00August 800 $38.00September 900 $29.00October 650 $29.50November 980 $35.50December 2200 $48.00Total2. Calculate the anticipated Beverage revenue per month and the yearly total.Month Customer numbers Average Spend Beverage RevenueJanuary 1850 $9.70 $ 17,945.00February 2000 $9.70March 700 $9.70April 1200 $9.70May 1200 $9.70June 600 $9.70July 950 $9.70August 800 $9.70September 900 $9.70October 650 $9.70November 980 $9.70December 2200 $9.70Total3. Calculate the Total Revenue for each month and the yearly total.Month Customer numbers Average Spend Food Revenue Beverage Revenue TotalJanuary 1850 $45.00 $ 83,250.00 $ 17,945.00 $101,195.00February 2000 $37.00March 700 $42.00April 1200 $48.00May 1200 $36.50June 600 $35.00July 950 $34.00August 800 $38.00September 900 $29.00October 650 $29.50November 980 $35.50December 2200 $48.00Total4. 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 OverheadsJanuary $101,195.00 $ 91,075.50February $ 93,400.00March $ 36,190.00April $ 69,240.00May $ 55,440.00June $ 26,820.00July $ 41,515.00August $ 38,160.00September $ 34,830.00October $ 25,480.00November $ 44,296.00December $126,940.00$693,506.00Total $693,506.005. Calculate the profit for each month and the yearly total.Turnover Total Profit OverheadsJanuary $101,195.00 $10,119.50 $ 91,075.50February $ 93,400.00March $ 36,190.00April $ 69,240.00May $ 55,440.00June $ 26,820.00July $ 41,515.00August $ 38,160.00September $ 34,830.00October $ 25,480.00November $ 44,296.00December $126,940.00$693,506.00Total $693,506.006. Calculate the Cost of Goods Sold for food and beverages, given a combined percentage of 32%.Turnover Total COGS – Food & BeverageJanuary $101,195.00 $ 32,382.40February $ 93,400.00March $ 36,190.00April $ 69,240.00May $ 55,440.00June $ 26,820.00July $ 41,515.00August $ 38,160.00September $ 34,830.00October $ 25,480.00November $ 44,296.00December $126,940.00$693,506.00Total $693,506.007. 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 CostsJanuary $101,195.00 $ 31,370.45February $ 93,400.00March $ 36,190.00April $ 69,240.00May $ 55,440.00June $ 26,820.00July $ 41,515.00August $ 38,160.00September $ 34,830.00October $ 25,480.00November $ 44,296.00December $126,940.00$693,506.00Total $693,506.008. Calculate the ‘Other overheads” for the operation.Month Overheads COGS – Food & Beverage Staff Costs Other OverheadsJanuary $ 91,075.50 $ 32,382.40 $ 31,370.45 $ 27,322.65February $ 84,060.00March $ 34,742.40April $ 62,316.00May $ 49,896.00June $ 25,747.20July $ 39,854.40August $ 36,633.60September $ 33,436.80October $ 24,460.80November $ 42,524.16December $114,246.00$638,992.86Task 3Your Tasks:Read the following 3 scenarios and answer the questions attached for each scenario.Scenario 1:The finance team has created budget forecasts for Hotel VACTS based on carefully researched factors for the last 3 years and these were always very accurate. The recent budget which included all departments of the hotel was implemented 3 months ago and the forecasted figures for Food Cost and COGS/Beverages in both the Restaurant and the Bar Operations have blown out by nearly 4.5 percent.What could be the reasons for this? List 5 examples of areas you would investigate and explain why.Scenario 2:Hotel VACTS has successfully operated for 7 years. During this period, overall turnover has doubled, and during the past 3 budget periods annual budgets have been increased by 15% each year which was exceeded each time. During the last 6 months however, management has noticed that the opposite trend seems to be occurring now.List 5 external factors which could contribute to this and explain which methods you would use to determine this.Scenario 3:You have successfully negotiated the draft budget with each department head of the Hotel which has now been approved by the director and implemented 6 weeks ago.You have finalised the financial data of the Hotel for the next management meeting and noticed the following:a.Department Budget Actual VarianceKitchen/Food Cost 28% 32% (-)$ 13467b. 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 performancesTask 1and Task 2(example calculation provided on excel sheet above.)Task 3Your 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 , Faulty kitchen equipment contributing to wastage)• Lack of Skills from staff• Poor Quality of Perishables• Portion Control Issues/ Recipe Management• Price IncreasesScenario 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 usedPricing compared to opposition in the areaPolitical factors e.g. elections, unemploymentInfrastructure issues e.g. building activities that may affect access, noise, slowed traffic etc.Negative feedback, customer dissatisfactionAccounting 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 VarianceKitchen/Food Cost 28% 32% (-)$ 13467d. 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 GuidelinesWhat will be assessed–Performance EvidenceThe 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 componentso analysis of factors that impact on the budgeto completion of draft and final versions of budget within designated timelines• monitor and review the above budget against performance over its life cycle.Resource RequirementsAssessment must ensure access to:1. Computers, printers and accounting software packages2. 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 can discuss, and negotiate draft and final budget componentsInstructions for assessment including WHS requirementsYour 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 3Budget ProjectTaskPrepare 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 expensesI 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:________________________________InstructionsVACTS restaurant has provided the previous P/L statement below.VACTS anticipates:a. 5 % rise in sales each year, andb. 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 APrepare a draft budget given the below assumptions. And answer the following questions1) 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 statementFormat of Profit and LossYear 1Sales $2,000,000Direct cost of sales $1,300,000Other 0Total cost of sales $1,300,000Gross margin $700,000Gross Margin %Expenses 35.00%Payroll $300,000Sales and marketing and other expenses $80,000Depreciion $7,000Leased equip/van/dispensing system $12,000Utilities $24,000insurance $20,000Other taxes $24,000Other 0Total operating Expenses $467,000Task BPrepare 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 LossDraft FinalSales $2,100,000Direct cost of sales $1,352,000Other 0Total cost of sales $1,352,000Gross margin $748000Gross Margin %Expenses 28%Payroll $309000Sales and marketing and other expenses $82400Depreciion $7,210Leased equip/van/dispensing system $12,360Utilities $24720insurance $20,600Other taxes $24,720Other 0Total operating Expenses $467,000Format of Profit and LossActualDraft Final figure varianceSalesDirect cost of salesOtherTotal cost of salesGross marginGross Margin %ExpensesPayrollSales and marketing and other expensesDepreciionLeased equip/van/dispensing systemUtilities insuranceOther taxesOtherTotal operating Expenses4. Refer to the actual figureWrite 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 = varianceb. 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 CommentsConsultationThe consultation includes individuals relevant to the budgetThe scope of the budget is discussed – Eg Budgeted Profit andLossThe budget factors have been analysedThe scope of the budget has been confirmed2 Draft BudgetThe draft budget is prepared correctlyEach factor is reflected in the draft budgetThe income and expenditure is supported by valid informationThe organisational objectives are reflected in the draft budgetThe recommended and agreed changes are outlined in the draft budget as per eg. provided3 Present Draft BudgetThe draft budget is presented to the relevant partiesThe budget components are reviewedRequired changes are negotiated and documentedThe final changes are approved by an authorised person4 Prepare Final BudgetThe final budget is prepared within agreed timeframesAll negotiated details are reflected in the final budgetThe budget data is correctThe final format for the budget is professional to industry standardThe final budget is approved and signed5 Monitoring BudgetThe budget performance is monitored according to the agreed intervalsThe variances are calculatedAll under-over performances have been identified correctly6 Reviewing Budget performance targetsActions have been suggested where deviations have been identifiedThe recommended actions are relevantThe recommended actions are realistic given operational aspectsChanges of internal and external factors analysed are reflected in changes to the budgetWhere changes are made, these are communicated to all relevant partiesActioned changes to the budget are approved by authorised staff7 Evaluation of BudgetThe budget is evaluated reflecting performanceSuggestions are provided for future improvements, reflected in the summary report.

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