SITXFIN003 MANAGE FINANCES WITHIN A BUDGET-Case Study-Part 1

ASSESSMENT METHOD 2 – CASE STUDY – PART 1

Instructions to students

1. This assessment requires you to manage and report on budgets

2. You must complete following tasks in this assessment

Task 1- Monitor budgets

Task 2 -Calculate variances
Task 3- Complete budget report

3. To be satisfactory in this assessment you must demonstrates all the skills satisfactory listed
in the marking guide

4. You must use a word processing software to complete Task 1 & Task 3 in & spreadsheet
software to complete task 2.

5. Your assessor will provide you the soft copies of required templates for this assessment

6. Recommended font sizes of the document should range between 10 and 14 and font type
should be as Calibri, Arial, Times New Roman or Tahoma

7. You could complete this assessment in classroom, Computer lab or self-paced.

8. You must spend approximately 2 hours to complete this assessment.

9. Ask your assessor, if you do not understand a question. Your assessor cannot tell you the
answer he/she may be able to re-word the question for you

10. On completion, you are required to submit all the parts to your assessor.

11. Your trainer/assessor will inform you the submission date

12. The additional and specific instructions are listed under each task

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Instructions to complete task 1 task 2 and task 3

1. Read the scenarios and complete reports.

2. Round all dollar values to the nearest whole number when calculating financial information;
for example, $12.55 becomes $13, $18.22 becomes $18.

3. Unless stated otherwise, round all percentages to one decimal point when calculating
financial information; for example, 12.55% becomes $12.6%, 18.22% becomes 18.2%.
4. All budget calculations must be completed using accounting software or computer-based spreadsheet software,
such as Microsoft Excel or Google Sheets.

Case study
The Jackson hotel has a bistro, two bars (public and sports), a drive-through and walk-in bottle
shop and TAB situated beside the sports bar.

You are the manager of JJ’s Bistro. It seats 210 people and is open for lunch and dinner, seven
days a week. The hotel promotes a family environment and has a playroom for younger children
and an activity centre for pre-teens containing electronic and other games. These glass walled
areas are within view of customers seated in the rear section of the bistro.

The hotel’s management team develop an operational budget for the business based on
previous budgets, anticipated business and any special projects, such as renovations or new
products. Each operational area within the hotel is given a departmental budget based on
organisational goals and their anticipated revenue and expenses.

Budgets are developed on a quarterly basis. Each department has quarterly and monthly
budget targets. Monthly budgets can be adjusted during a quarterly cycle if circumstances
within the department change.
The following events have taken place during the April budget period.

 Prices for meat, fruit and vegetables have increased as a result of recent drought in some
regions and floods or storms in others.
 Prices for many wines have fallen due to a surplus in the market.
 Beer prices have risen slightly, again due to the drought leading to shortages of ingredients
and an increase in government taxes.
 A major wine supplier has been running an in-house promotional campaign, with staff
product knowledge training provided to help increase sales.
 The bistro menu changes to the new winter menu on May 1 st. Its introduction is being
promoted in April throughout the hotel.

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Task 1: Monitor budgets

1. You must analyse the “Budget” given by the assessor and provide a report based on the
contents and outcomes of the Jackson Hotel operational budget – June quarter.

Budget Report
 Variable direct
costs

 Variable indirect
List the hotel’s financial commitments under their costs
correct cost category. Name at least two
commitments for each category
 Fixed indirect
costs

Name the top four cost categories the business

has allocated the most funds too in this budget
period.

Explain why have significant funds been allocated

to these categories?

Discuss their importance to the business and

consequences if inadequate funds are allocated

Consider budget – April.

You are holding a team meeting to discuss the
financial targets provided in the organisational and
April bistro budgets.

Explain what information do you need to

communicate to the team to ensure they
understand the targets and goals to be achieved

Explain what techniques can you use to promote

awareness of methods of controlling costs or
increasing sales so you can achieve budget targets

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Task 2: Calculate variances

1. You must analyse the “Budget” given by the assessor and provide a report based on the
contents and outcomes of the Jackson Hotel operational budget – June quarter

2. Complete the comparative analysis report for the Bistro departmental budget – April by
calculating all missing dollar value and percentage variances.

3. Complete the Favourable/Unfavourable column by indicating if the budget results are

favourable (F) or unfavourable (UF) for the business.

4. You must complete the above tasks using suitable spreadsheet software. Eg MS Excel.

Task 3: Complete Budget Report- April

1. Complete the below report based on the budget outcomes in the completed April budget
comparative report in Task 2 and case study information.

Document if there are any significant variances in

the sales figures that you should be concerned
about. If so explain what the results indicate and
why you are/are not concerned about them

List any significant variances in any of the expenses

categories that you think should be investigated
further. If so, discuss which categories and why
you think they need investigation. If no, discuss
why the deviations do not warrant investigation

Based on your responses to the above 2 contents,

explain your overall evaluation of the budget
results. Is the bistro meeting its financial targets

Which expense category has the most funds

allocated to it? Explain why it is important you
manage costs in this category carefully.

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Using the results and information obtained from

the April comparative report, your responses to
the to the previous contents and the background
information, write a transcript of the outcomes of
your report ready to deliver to the bistro staff at
the next team meeting. The transcript should
include the following information.

 The current status of the budget; is the work

area meeting its budget targets, is it on track
to meet June quarter budget targets?
 Which areas are underperforming or
performing better than expected?
 What changes, if any, need to be made to help
the team meet next month’s budget targets?
 An outline of budget targets for May.
 Organisational factors that contributed to the
setting of these targets.

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To be completed by the assessor.

Marking Guide – case study Part 1

Student successfully demonstrate evidence of their Satisfactory If not satisfactory please comment
ability to do the following
Yes No

Monitor income and expenditure and evaluate

 
budgetary performance over budgetary life cycle.

Inform the changes to income and expenditure

 
priorities to team members before implementation

Allocate funds according to budget and agreed

 
priorities.

Use financial records to regularly check actual

 
income and expenditure against budgets.

Provide explanation report for consultation to

 
relevant personnel about resources decisions

Make awareness of the importance of

 
maintaining and controlling the budget

Problem solving skills to identify and report

 
deviations according to significance of deviation.

Include financial commitments in all

 
documentation to ensure accurate monitoring

Investigate appropriate options for more effective

 
management of deviations

Identify and report deviations as per the

 
significance of deviation

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Student successfully demonstrate evidence of their Satisfactory If not satisfactory please comment
ability to do the following
Yes No

Communicate with and advise colleagues of

 
budget status in relation to targets.

Assess existing costs and resources and

 
proactively identify areas for improvement.

Numeracy skills to interpret and use budget

 
figures in day-to-day work operations.

Interpret business and financial documents and

document clear recommendations based on  
budget information and reports.

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