Analysis on Budget Variance | My Assignment Tutor

SITXFIN003 Manage finances within a budget Task 1 – Case Study – Analysis This task consists of 2 parts, Part A and Part B. For Part A you are required to complete a budget analysis. For Part B you are required to answer questions relating to the importance of monitoring and analysing budgets and identifying methods to rectify shortfalls. PART A Case Study Analysis on Budget Variance Top of the Town Hotel has asked you to calculate the variance for the following figures for the month of July and August. Also calculate the total profit that was budgeted and actual. Analyse the findings and inform them about the variance as they are concerned and would like to monitor the income, expenditure, profit levels, budgetary performance of their Food and Beverage Department. ItemJulyAugustBudgetActualVarianceBudgetActualVarianceSales Revenue230,000225,000230,000228,000Food Costs85,00087,00085,00086,000Beverage Costs14,00015,00015,00015,000Labour Costs77,00082,00078,00082,000Fixed Costs35,00035,00035,00035,000Total CostsProfit The Hotel owners and managers would like to know from you the major areas of concern where there is a deviation that needs further monitoring and improvement. PART B Answer the following questions. Questions: Explain the importance to the owners of monitoring budgets and why do you think it will help them to manage their finances better for the business. ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Explain to them the use of analysing the monthly budget and comparing the forecasted budget against the actual budgets. ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ____________________________________________________________________________________________ Explain your findings and possible reasons for these variances. ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ Research and suggest what improvements do you think the owners can take to improve this situation? ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________