Assessment Tool: Assessment Task 1: Knowledge Questions

ASSESSMENT TOOL
Qualification: SIT501416 Diploma of Hospitality Management

Cluster number and name: HD_4.2 Manage finances and monitor budgets
Units of competency: SITXFIN003 Manage finances within a budget
SITXFIN004 Prepare and monitor budgets
Student’s ID: Salinee Khanthawa 44207
Assessor’s name: Andre Brun
Students – please ensure

you read the assessment
instructions and are ready
to be assessed prior to
undertaking the
assessment tasks
ASSESSMENT TASK 1: KNOWLEDGE QUESTIONS

Assessment type:
 Knowledge questions

Assessment task description:
 This tasks consist of knowledge questions where you will demonstrate your knowledge of
managing finances within a budget and preparing and monitoring budgets which student
must respond to all the questions and submit them to the Trainer/Assessor.
 Student must answer all questions to the required level, e.g. provide the number of points,
to be deemed satisfactory in this task.
 Trainer/Assessor is required to provide feedback within two weeks and notify student when
results are available.
Applicable conditions:
 This knowledge questions are untimed and are conducted as an open book assessment
(this means students can refer to their workbook or the internet to conduct research during
the assessment). However, the answers must be in the student’s own words to
demonstrate their own understanding of each individual question.
 Student must read and respond to all questions which they must complete independently.
 No marks or grades are allocated for this assessment task. The outcome of the task will be
Satisfactory or Not Satisfactory.
 The trainer/assessor may ask student relevant questions on this assessment task to ensure
that this is his/her own work.
 Where a student’s answers are deemed not satisfactory after the first attempt, a
resubmission attempt will be allowed.
 Student may speak to their Trainer/Assessor if the student has any difficulty in completing
this task and requires reasonable adjustments.
Purpose of the assessment

The purpose of this assessment task is to ensure that students have the knowledge of:
 different types of financial records and budgets
 factors for consideration in the preparation of financial and statistical reports
 use, contents of and formats for:
 budgets
 financial reports
HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

2019
Page 1 of 59
ASSESSMENT TOOL
 statistical reports
 budget terminology
 specific industry sector and organisation
 budget preparation and monitoring practices and techniques:
 sources and contents of data required for budget preparation:
Assessment Conditions
Skills must be demonstrated in an operational tourism, travel, hospitality or events business
operation or activity for which budgets are prepared. This can be:
 an industry workplace
 a simulated industry environment.
Assessment must ensure access to:
 computers, printers and accounting software packages
 financial and operational data and reports used to prepare budgets
 others with whom the individual can discuss, and negotiate draft and final budget
components; these can be:
 those in an industry workplace who are assisted by the individual during the
assessment process; or
 individuals who participate in role plays or simulated activities, set up for the
purpose of assessment, in a simulated industry environment operated within a
training organisation.
Benchmark for Assessment

You are expected to respond to all aspects of each question. In some cases, direction is provided
on the expected length of your response. Some questions will require a Short, Medium or Long
response. The following is a guide to the expected number of words for each of these categories
unless otherwise indicated.
Short 30+ words
Medium 100+ words
Long 200+ words
Questions:
1.1. List five (5) financial records and briefly explain the purpose of each one. (Guide: Medium)
Students may provide the following examples
Financial Purpose
Records
1 Invoice In financial accounting, a sales invoice (or invoice) is a document

used by a company to communicate to clients about the sums
that are due in exchange for goods and services that have been
sold. Invoices help businesses get paid and provide legal

2019
Page 2 of 59
ASSESSMENT TOOL
protection for both sellers and buyers.

https://www.hashmicro.com/blog/sales-invoice-definition-
purpose/
2 Profit & Loss A company's income statement provides details on the revenue
(Income a company earns and the expenses involved in its operating
Statement) activities. Overall, it provides more granular detail on the holistic
operating activities of a company. Broadly, the income statement
shows the direct, indirect, and capital expenses a company
incurs.
https://www.investopedia.com/ask/answers/031815/how-are-
three-major-financial-statements-related-each-other.asp
3 BAS Statement A Business Activity Statement (BAS) is a form issued by the

Australian Tax Office (ATO) on a monthly or quarterly basis.
This pre-printed form is filled out by all business owners who are
registered for GST. It allows you to report and pay for all of your
tax obligations for a specific reporting period in one easy
transaction.
https://resourcecentre.businessesview.com.au/2019/03/point-
business-activity-statement-bas/
4 Balance Sheet a company's balance sheet provides information on what the

company is worth from a book value perspective. The balance
sheet is broken into three categories and provides summations
of the company's assets, liabilities, and shareholders' equity on a
specific date.
5 The Cash Flow The cash flow statement provides a view of a company’s overall
Statement liquidity by showing cash transaction activities. It reports all cash
inflows and outflows over the course of an accounting period
with a summation of the total cash available.

2019
Page 3 of 59
ASSESSMENT TOOL
1.2. Discuss with your group the following types of budges and briefly explain each one.
(Guide: Medium to Long)
Cash budget/ cash flow A cash flow budget is an estimate of all cash receipts and all
budget cash expenditures that are expected to occur during a certain
time period. This budget is used to assess whether the entity has
sufficient cash to operate.
Wage budget Wage budget is the cost incurred by companies to pay hourly
employees. This line item may also include payroll taxes.
Departmental budgets A departmental budget allows the firm to analyze the costs and
expenses related to a certain department and whether the firm's
income is sufficient to meet these expenses. Managers must
examine whether their budgetary assumptions and estimates
are reasonable. Budget targets should match manager
responsibilities. At the departmental level, the budget considers
the expected work output and translates it into estimated future
costs.
Event budgets A budget is a detailed forecast of what will be happening

financially at your event. It helps control your expenses and
revenues, and measures the success of your meeting or event
performance.
Project budgets The Project Budget is a tool used by project managers to

estimate the total cost of a project. A project budget template
includes a detailed estimate of all costs that are likely to be
incurred before the project is completed
Purchasing budget A purchases budget contains the amount of inventory that a

company must purchase during each budget period. The amount
stated in the budget is the amount needed to ensure that there
is sufficient inventory on hand to meet customer orders for
products.
Sales budgets Provides an estimate of the volume of goods and services that a
company proposes to sell in a future period. It is usually made

2019
Page 4 of 59
ASSESSMENT TOOL
for the following year
Whole organisation Whole organization budgets include all departments and their
budgets expenses which gives to total costs to the organization
Master budget the aggregation of all lower-level budgets produced by a

company's various functional areas
1.3. Explain the following accounting terminologies used in budgeting.

Students may provide the following examples
Fixed cost Indirect costs or overheads are business expenses that are not dependent
on the level of goods or services produced by the business.
Variable cost Are those costs that vary depending on a company's production volume;
they rise as production increases and fall as production decreases.
Variable costs differ from fixed costs such as rent, advertising, insurance
and office supplies, which tend to remain the same regardless of
production output.
Direct cost For manufacturing an automobile are materials such as the plastic and
metal materials used as well as the labor required to produce the finished
product. Indirect costs include overhead such as rent, administrative
salaries or utility expenses.
Indirect cost or Are costs that are not directly accountable to a cost object (such as a
overhead particular project, facility, function or product). Indirect costs may be
either fixed or variable. However, some overhead costs can be directly
attributed to a project and are direct costs.
Depreciation Is a method of reallocating the cost of a tangible asset over its useful life
span of it being in motion. Businesses depreciate long-term assets for both
tax and accounting purpose. Generally, the cost is allocated, as
depreciation expense, among the periods in which the asset is expected to
be used.
1.4. Many factors need to be taken into consideration when preparing financial and statistical
reports. Tick all those that apply from the list below:

2019
Page 5 of 59
ASSESSMENT TOOL
 cash flow
 commercial account activity
 commission earnings
 daily, weekly and monthly transactions
 expenditure and income
 price of milk and bread
 performance of department, project and/or products and services
 sales performance
 cost of petrol
 staff costs
 dollar value of stock levels and wastage
 variance in income and/or expenditure
 number of people coming to the staff Christmas party
 yield
1.5. List 2 financial reporting cycles relevant to the travel, tourism and hospitality sector?
(Guide: Short)
BAS/ GST End of financial year
1.6. Discuss with your group and explain one technique you could use to maximise the
performance of budgets.
•Make sure the budget you have prepared includes all the key indicators you wish to control.
•Use budgeting software to set realistic budgets based on historical data.
•Give responsibility for budget items only to individuals with the authority to control the
outcome.
•Schedule regular reviews of budget performance.
•Review budgeted figures to identify cash flow or other problems that can be anticipated
and tackled in advance.
•Use your software's exception reporting and alerts to flag potential issues.
•Compare margins, working capital and other key ratios with historical figures to identify

2019
Page 6 of 59
ASSESSMENT TOOL
how performance is expected to improve or deteriorate.

•Carry out a sensitivity analysis to see what effect different outcomes could have on
performance.
•Focus on controlling items that could have a significant effect on overall business
performance. For example, reducing waste, eliminating unnecessary spending, monitoring
overtime or focussing sales efforts on the targets most likely to convert to profitable
business.
•As figures become available, compare actual sales to budget and identify reasons for this
sales variance.
•Determine how fixed costs differed from budget and whether any changes are likely to be
permanent such as increases to the minimum wage.
•Analyse the extent to which variances in variable costs reflect sales variances, or whether
prices or efficiency have changed.
•Identify to what extent variances in income or expenditure reflect differences in timing
rather than performance.
•Take action to sort out underperformance or excessive expenditure that can be controlled.
•Capitalise on unexpected favourable changes.
•Revise future budgets in the light of the most up-to-date information.
1.7. List two (2) accounting software program you could use in a business and list some its
features.
(Guide: Short)
Two accounting software packages are MYOB and QuickBooks. They allow a business to
manage their accounts payable and accounts receivable. They keep track of purchases and
sales and manage customers’ accounts.
1.8. Explain what cash flow budgets are used for and why cash flow budgets are important for
the businesses?
A cash flow budget is an estimate of all cash receipts and all cash expenditures that are
expected to occur during a certain time period. Estimates can be made monthly, bimonthly,
or quarterly, and can include nonfarm income and expenditures as well as farm items. Cash
flow budgeting looks only at money movement, though, not at net income or profitability.
They are important to make sure that the business can meet all payments when required and
make sure we have enough cash to pay bills.
1.9. Research the following and explain each one in your own words:

2019
Page 7 of 59
ASSESSMENT TOOL
(Guide: Medium).
a. Budget
b. Financial report
c. Statistical report
A) Budget is a figure that is allocated to a specific task and is used to limit spending so that
it’s within what is agreed by management in advance.
B) Financial report includes details such as profit and loss and shows how cash flow is going
compared to the budget.
C) Statistical report analyses figures, will show trends where figures may be going up or
down, and allows spending to be checked as it happens.
1.10. Many internal and external factors could impact on budget development.
(Guide: Tick all those below that apply)
 growth or decline in economic conditions
 human resource requirements
 new legislation or regulation
 unexpected loss of electricity
 organisational and management restructures
 organisational objectives
 staff taking too much sick leave
 shift in market trends
 public holidays and sporting events such as Melbourne Cup
 significant price movement for certain commodities
 supplier availability and their charges
1.11. When preparing budgets there are many sources and contents of data required.
(Guide: Tick all those below that apply)
 competitor, customer and supplier research
 footie tipping data
 declared commitments in areas of operation

2019
Page 8 of 59
ASSESSMENT TOOL
 financial information from suppliers

 financial proposals from key stakeholders
 income and expenditure for previous time periods
 social club balance
 departmental, event or project budgets
 staff Christmas party survey
 grant funding guidelines or limitations
 management policies and procedures
 organisational budget preparation guidelines
 performance information from previous periods
 Staff performance review data
1.12. List four (4) techniques for making budget estimates and briefly explain each one.
(Guide: Medium)
Financial Records Purpose
1 Bottom-up Bottom-up which requires every detail of the project to be

estimating coted individually and then added together to get the total
project cost.
2 Parametric Parametric estimates that use average costs from projects that
estimating have the same products but may be different in size and adjust
for the difference.
3 Analogous Analogous estimate which uses data from other similar projects
estimating as a guide to how much the project is likely to cost.
4 Three point 3-Points is a procedure that includes individuals that are

estimating proficient
in the errand we are assessing by this strategy. In three-point
assessment, three figures are delivered at first for each
dissemination that is required, in light of related knowledge or
best-surmises
1.13. List five (5) common causes of budget deviations and how this can be managed?

2019
Page 9 of 59
ASSESSMENT TOOL
(Guide: Short to Medium)
1. Emergency purchases which may be due to upsets in production program, slackness

of store keepers, non-availability or funs etc.
2. Use of substitute material of different prices
3. Increase in labor turnover – can avoid by hire staff who have strong skills that match
your open position.
4. Lack of products available from suppliers - this can be limited by solid agreements
with suppliers.
5. Workplace accidents - can be avoided by having safe work practices. Most deviations
can be reduced or eliminated by good planning in advance.
1.14. Explain how the following internal factors can impact on budgets.
(Guide: Medium)
Management When a business eliminates layers of management during its

restructure restructuring, communication and decision-making often improve.
Simplifying management reorders the organizational hierarchy of a
company, opening the lines of communication and removing barriers
to productivity.
Human resources It prevents over hiring. It helps organizations understand their

requirements staffing needs.
New projects and It enables the business owner to concentrate on cash flow, reducing
business objectives costs, improving profits and increasing returns on investment.
Changes in commodity the possibility that commodity price changes will cause financial
or service prices losses for the buyers or producers of a commodity
1.15. Explain how the following external factors can impact on budgets.
(Guide: Medium)
Legislation and Certain legislative changes have a direct impact on budget

regulations projections. In most cases, businesses will be aware of pending
legislation before it takes effect and can plan accordingly.
Sometimes, just the introduction of future legislation, even if it has

2019
Page 10 of 59
ASSESSMENT TOOL
not taken effect, will disrupt current budget projections
Changes in the global The economy and current market conditions can impact the financial
economy forecast in several ways. Changes to the inflation rate and stock
market conditions directly affect the organization's net worth and its
ability to generate funds or loans. If the company relies heavily on
investments as a funding vehicle, then poor stock market
performance will have a direct, negative effect on budget
predictions. Likewise, if the rate of return on investments
outperforms the prediction, then the budget will have a surplus.
Market trends Company have to analyze what you’re currently doing and evaluate
the success of those efforts. It’s imperative that you keep a constant
eye on marketing trends so you can get the best results for dollars
spent. Trends and emerging technologies are going to have a big
impact on your bottom line, but how much should you be spending
on inbound marketing
1.16. Describe how the following sources of data can be used for budget preparation.
(Guide: Long)
Competitor research Competitive research is a field of strategic research that specializes

in the collection and analysis of information about rival firms. It's an
essential tactic for finding out what your competitors are doing and
what kind of threat they present to your financial well-being.
Customer or supplier To get good price, good quality from supplier. We should research
research all supplier’s condition.
Customers are the reason your business exists. Gathering as much
information as you can about them through customer research will
help refine and grow your business.
Declared commitments Declared commitments in areas of operation: upcoming events,

in areas of operation projects or minimum standards of service within the business,
financial commitment
Financial information When company is considering which supplier to select for a major
from suppliers contract, it wants to review their financial statements first, in order
to judge the financial ability of a supplier to remain in business long
enough to provide the goods or services mandated in the contract.
Financial proposals They may be individuals or organizations that are actively involved in

2019
Page 11 of 59
ASSESSMENT TOOL
from key stakeholders the project, or whose interests may be affected by the execution or
completion of the project for budget preparation. It is important to
identify the stakeholders early in the project, and to analyze their
levels of interest, expectations, importance and influence.
Key stakeholders can provide requirements or constraints based on
information from their industry that will be important to have when
understanding project constraints and risks. The more you engage
and involve stakeholders, the more you will reduce and uncover risks
on your project.
Performance Analyze your successes and failures during the previous year.
data/information from
Look at your key objectives for the coming year and change or re-
previous time periods
establish your longer-term planning.
Budgeting represents a company's financial position, cash flow and
goals. A company's budget is usually re-evaluated periodically,
usually once per fiscal year, depending on how management wants
to update the information. Budgeting creates from Performance
data/information from previous time periods
Departmental, event or The event budget is a projection (forecast) of the income and
project budgets expenditure that the event will incur based on plans made and
information gathered.
The preparation of a budget is an essential part of event
management. It is fundamentally important that Event Directors are
able to predict with reasonable accuracy whether the event will
result in a profit, a loss or will break-even. This is achieved by
identifying and costing all probable expenditures and by totaling all
expected revenues (income). By comparing expenditures and
revenues, it then becomes possible to forecast the financial outcome
of the event.
Grant funding Business Find grants, funding and support programs from across
guidelines or limitations government to help your business grow and succeed.
They give business amount money to spend it for supporting
business.
Management policies If you're a one-person business, you don't need a budget policies and
and procedures procedures manual. As you grow, though, you may have to bring in
more employees; if you incorporate, you'll also have a board of
directors to answer to. Having a manual that spells out the financial
policies and procedures for your small business may start to look like

2019
Page 12 of 59
ASSESSMENT TOOL
a good idea.
A sample procedure could be:
 Review your strategic plan for the company.

 Set business goals based on the plan.
 Identify your fixed expenses, such as rent, insurance and
employee expenses.
 List variable costs, such as overtime.
 Draw up projects that advance your business goals. Identify
the costs of the project.
 Set your profit margin.
 Submit the budget to your board or stakeholders for approval.
If they have objections, either convince them to support your
budget or make the requested changes.
You should also have procedures for a regular budget review to see
how close you come to your projections. If, say, there's an
emergency requiring a cash fix, you'll have to adjust your budget. If
one of your departments is overspending, you may have to rein them
in or cut spending somewhere else to balance it out.
Organisational budget Business transactions, is that of preparing a budget. A budget is a

preparation guidelines tool used for planning and controlling your financial resources. It is a
guideline for your future plan of action, expressed in financial terms
within a set period of time. A budget does not have to be complex.
1.17. How does involving staff “from the bottom up” in the budgeting process, help the business?
(Guide: 50 - 100 words).
The bottom-up approach ensures that all staff are involved in the preparation of the budget,
which means they will work harder to achieve the budget than they would if it were just
handed down by management using a top-down approach.
1.18. Read the case study below and answer the questions.
Case Study Analysis on Budget Variance
Top of the Town Travel Tours 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 Tour and
Beverage Departments.

2019
Page 13 of 59
ASSESSMENT TOOL
Item July August
Budget Actual Variance Budget Actual Variance
Sales 230,000 225,000 5,000U 230,000 228,000 2,000U

Revenue
Tour Costs 85,000 87,000 2,000U 85,000 86,000 1,000U
Tour 14,000 15,000 1,000U 15,000 15,000 0

Beverage
Costs
Labour 77,000 82,000 5,000U 78,000 82,000 4,000U

Costs
Fixed Costs 35,000 35,000 0 35,000 35,000 0
Total Costs 211,1 219,000 8,000U 213,000 218,000 5,000U

00
Profit 19,000 6,000 13,000U 17,000 10,000 7,000U
The Town Travel Tour 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.
• Sales revenue decrease in August which is good for the business also tour costs have
a small variance.
• Labour costs need to be monitoring and improving as it is a big variance in July and
August. Anyway, the tendency of the business has potential to get more profit in the future.
1.19. 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.
(Guide: Long).
By referring to the budget, businesses can measure performance against expenditure and
ensure that resources are available for initiatives that support business growth and
development. It enables the business owner to concentrate on cash flow, reducing costs,
improving profits and increasing returns on investment .However, Control cost will make the

2019
Page 14 of 59
ASSESSMENT TOOL
business run longer.
1.20. Explain to them the use of analysing the monthly budget and comparing the forecasted
budget against the actual budgets.
(Guide: Medium).
A budget is a detailed statement of expected revenues and expenditure which quantifies the
tactical plans of the management to reach a desired goal for the company during a specified
period. Through a budget, you can convert your action plan for your company into estimates
of revenue and expenses, cash flows, debt requirements, etc. and gauge the feasibility of
your vision and prepare a baseline for comparing your actual performance. Forecasting is an
estimation of future outcomes which quantifies where the company is headed during the
forecasted period. Forecasts, being strategic, help companies to realize their growth plans.
Financial forecasting will help you to model various scenarios and evaluate whether your
company will meet your strategic growth plan.
1.21. Explain your findings and possible reasons for these variances.
(Guide: Medium).
Declining Sales Revenue

The future of tourism will be impacted by large-scale social, economic, political,
environmental and technological changes, bringing new and often unseen challenges, threats
and opportunities.
There are non-price factors that impact tourism demand. The climate of a location is an
important factor. If the climate is too hot or too cold, demand will be impacted. The
reputation of The condition of the economy at home and abroad also affects tourism demand.
If the economy is good, people may be more willing to travel, since they may have more
disposable income.
Labor costs variance: the variance because business hire too many full-time staffs even in
low season.
1.22. Research and suggest what improvements do you think the owners can take to improve this
situation?
(Guide: Medium).
For Low season we can reduce labor cost by cut off full time staff and do more free social
media promotion and when high season coming we can hire more casual staff to do
promotion attract customer.

2019
Page 15 of 59
ASSESSMENT TOOL
ASSESSMENT TASK 2: MANAGE FINANCES WITHIN A BUDGET

Assessment type:
 Case study and practical activities

 This is the second assessment task which consists of case studies and practical activities
where you will demonstrate your ability of managing finances within a budget and
preparing and monitoring budgets.
 The presentation is timed and you will be allocated 10 to 15 minutes to conduct the
meeting. Students answers must be in the student’s own words to demonstrate their own
understanding of each individual question.

The purpose of this assessment task is to ensure that students have the ability to demonstrate the
following in the context of a job role:
 manage a budget for a business over a three-month period that meets the specific
business’ needs
 undertake at least two of the following to inform management of the above budget:
 discussions with existing suppliers
 evaluation of staffing and rostering requirements
 evaluation of impact of potential roster changes
 review of operating procedures
 sourcing new suppliers
 monitor income and expenditure and evaluate budgetary performance over the above
budgetary life cycle
 complete financial reports related to the above budget within designated timelines and
using correct budget terminology.
 prepare a budget for a business that meets the specific business’ needs

2019
Page 16 of 59
ASSESSMENT TOOL
 demonstrate the following when preparing the above budget:

 consultation on 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.

Short 30+ words
Medium 100+ words
Long 200+ words
2.1. Case study
Read the case study and complete as indicated by guides provided.
You own a small travel services business.

It is the middle of Month 2 of your financial year and your accountant has just given you the
results for Month 1 and the latest sales forecast for Month 3 (next month).
Month 1 Month1 F/U Month 2 Month 3

Months vs.
Profit/Loss
Budget Actual Variance Budget Budget
Sales $50,000 $45,000 5,000 U $50,000 $37,500

2019
Page 17 of 59
ASSESSMENT TOOL
Purchases 22,000 20,000 2,000 F 22,000 10000
Advertising 500 2,000 1500U 500 750
Cleaning costs 500 500 500 500
Office supplies 2,000 1,750 250F 2,000 1750
Repairs & 1,000 3,000 2000U 1,000 1000

Maintenance
Telephone and 1,500 1,000 500U 1,500 1000

postage
Wages & on- 10,000 10,000 10,000 10000

costs
Profit (or Loss) $12,500 $6,750 $12,500 $12,500
a. Refer to the table on the above, identify and report the deviations (favourable or
unfavourable variances) for actual to budget for month 1?
(Guide: Short)
See complete chart above
b. In what areas do you feel corrective action may be required? Please provide one example
of corrective action for each identified area!
• Advertising – do less advertising and try to use more cheaper and effective on the
advertising to promote the business such as social media
• Repairs maintenance – Provide training course to showing them how to use the
equipment properly.
c. Your number one priority is to maintain a sufficient profit in your business. Given the
reviewed sales forecast for Month 3, plan the reallocation of funds for Month 3 if you still
wish to achieve the same profit as in Month 2.
Please explain how would you decide which areas to reallocate?
(Guide: Medium)

2019
Page 18 of 59
ASSESSMENT TOOL
In month 3, sales budget decrease to $37,500. Purchases budget decrease to $10,000. Office
supplies decrease to $1750 and telephone and postage decrease to $1000. To maintain a
sufficient profit in the business to get the same profit as in Month 2 I will put more budget on
advertising as these days we have many ways to put an effective advertising online that not
cost lots of money to the right target to get more sales and profit.
d. You have decided to organise a meeting with your colleagues where you are required to
present and discuss changes to income and expenses prior the implementation. In your
meeting you must address the following points:
 Advise the staff and colleagues of the budget status in relation to the targets
 Identify potential reasons for the deviations
 Explain the options for effective management of the deviations
 Inform them about your decision regards to resource allocation
 Promote the importance of budget control and monitoring
 Discuss the strategies, control systems and records used to monitor the budget
 What strategies could you implement to monitor resource usage throughout Month
3?
 How would you involve the staff in the budget planning, implementation and review
process?
 How would you keep the staff informed of any changes to the allocation of resources?
 What is the importance of the budget control?
Prior to conducting the meeting, you must make notes of the above points you are
going to discuss and get approval from your assessor to ensure that the ideas are
you won.
Identify potential reasons for the deviations

• Revenue shortfall due to an inaccurate estimate, or a sudden and unexpected spike in
operating costs.
• Unexpected equipment repair.
• Changing business conditions including changes in the overall economy and even
global trade.
Explain the options for effective management of the deviations
• As we noticed from the budget status, the actual spending on advertising is 2000 which
is more than the budget 1500, which could be decrease by several ways to maximize the
effective management. Our expectations are to profit at the end of the period, so we should

2019
Page 19 of 59
ASSESSMENT TOOL
adjust our budget by reducing our expenses and increasing our sales.
• By using social media could be a way more effective for the advertising compare to the
traditional ways and also can reduce the cost on the expenses.
• The another way is advertise on our target market, by doing some research on Internet
will allow us to know the customers base, allow us to find our potential customers.
Inform them about your decision regards to resource allocation
• We have decided to reduce our expenses and increase the sales regards to the
resources allocation.
• As we noticed, the actual spend on advertising is higher than our budget expectations,
to overcome the issues, by using social media is way more effective also allow us to reduce
our expenses on advertising.
• The sales on the budget status is slightly lower than our budget expectations, we have
to implement more strategies to attract more customers, such as pricing strategy, sales on
special events, and loyalty points for regular customers.
Promote the importance of budget control and monitoring
• All departments are required to regularly monitor actual activity to planned activity and
control their expenditure to ensure that it is in line with available funds and to ensure that
financial, operation and capital plans that were developed for implementation as part of
budget processes are being implemented also control their expenditure to ensure that it is in
line with available funds.
Discuss the strategies, control systems and records used to monitor the budget
• Budget monitoring is done to make sure that resources are being utilized as per plans
on the budget. Tracking or monitoring the way that financial resources are utilized or
effectively used is very important for every department and the organization. It is a continuous
process to ensure that objectives are being met as specified on the budget. It is through this
monitoring that you will be able to make budgeting decisions and take necessary or
appropriate actions whenever or wherever necessary. and we will analyze, adjust and review
the budget and actual.
What strategies could you implement to monitor resource usage throughout Month
3?
• Configure alerts to be notified when actual varies from a baseline. Early identification of
issues can help resolve problems.
• Advertising: company could focus to advertise to the target audience, and use free
advertising method such as Facebook or Instagram to reduce the costs.
• Repair& Maintenance: company could provide coaching or training sessions to relevant
staff members showing them how to use the equipment properly, less incidents will happen

2019
Page 20 of 59
ASSESSMENT TOOL
also to reduce cost of maintenance.

How would you involve the staff in the budget planning, implementation and review
process?
• Invite staffs to play part of the budget planning, by collecting their feedback,
suggestions and make sure everyone are agreed with the outcome.
• Encourage them to giving some ideas in the budget planning, encourages staffs to
become involved and contribute their input.
• Clearly explanation and procedures make sure staffs understood to the budget
implementation.
How would you keep the staff informed of any changes to the allocation of
resources?
• Meetings
• Memo
• Email
What is the importance of the budget control?

A budgetary control is a mechanism that helps senior managers ensure that spending limits
are adequate. This control is important because spending excesses have an unfavorable
impact on corporate profits. A budgetary control also ensures that corporate cash outflows and
inflows remain at adequate levels.
e. Presentation (10 to 15 minutes)

You are now required to use the notes you prepared and prepare a PowerPoint presentation
to present at a meeting with your colleagues. Your assessor will provide you with feedback.
(Guide: 8-10 slides)
https://sbtasela.sharepoint.com/sites/teamsgroup120186/Class%20Materials/Presentation
%20Class%20Recordings/Salinee%20Presentation.mp4
2.2. Case Study

You are the Accountant for a small retail business and have been asked by management to

2019
Page 21 of 59
ASSESSMENT TOOL
review and examine the following financial report for the month of July and complete the
questions asked
Line Item Budget $ Actual $

1
1 Sales 45000 40000
2 Cost of Goods Sold 22500 20500
3 Gross Profit 22500 19500
4 Expenses
5 Wages 14000 14700
6 Packaging 400 350
7 Cleaning 350 300
8 Advertising 2500 2700
9 Rent - premises 2600 2850
10 Telephone 400 430
11 Total Expenses 20250 21330
12 Net Profit 2250 (1830)
a. Complete the chart below by identifying variances and listing each variance as:
 favorable (F) or
 unfavorable (U).
(Guide: Include any comments you may have to explain the variances)
Line Variance Comments

No.
Type $ F/U
1 Sales 5000 U Sales must exceed the forecasted budget

in order to gain more profit.

2019
Page 22 of 59
ASSESSMENT TOOL
2 Cost of Goods Sold 2000 U
3 Gross Profit 3000 U Expected budget for gross profit must be

attained to ensure that all expenses can
be paid.
4 Wages 700 U Staff member on holiday. So casual staff

cover shift.
5 Packaging 50 F
6 Cleaning 50 F
7 Advertising 200 U We should reduce cost of advertising.

Focus more on social media
8 Rent - premises 250 U All expenses inside the work area must
remain the same, especially the resources
usage.
9 Telephone 30 U Give extra budget for these resources.
10 Net profit 420 U Expenses must be correlated to overall

income in order to make sure that there
will be net profit left.
b. Refer to the variance report above and explain any corrective actions that you believe
needs to be taken regarding the deviations! \
(Guide: Short).
According to the results from the table. We should control on expenses such as advertising and
telephone cost to not over budget and keep an eye on supply prices to do not increase.
c. The appropriate staff should be informed of the deviation, how would you inform them?
(Guide: Short).
Meeting
Memo
email
2.3. Case Study

2019
Page 23 of 59
ASSESSMENT TOOL
As a manager of an event management company, you are required to complete a cash flow
forecast using the template provided. Your cash flow forecast will predict the bank balance at
the end of each month for every month of the year. The information you have at your
disposal to complete this task is as follows:
 The event management company has on its books four (4) major events to run which
will take place in March, May, August, and October.
 The total of $285,000 of ticket sales will be earned in the months that the events are
held. The March event will earn $65,000, and the other events in May, August and
October will earn $70,000, 85,000 and $65,000 respectively.
 Expenditure on casual salaries, travel and transport, and venue hire will occur only in
the months in which the four events take place. These expenditures will be the same
for each event.
 Salaries and Office and administration expenses will occur evenly every month.
 The company's opening bank balance on 1 January is $5,000
 The company will receive a government grant of $50,000 in July.
 The company will make a small income from Merchandising during the months in
which the four events are staged. The event in March will earn $1,300 merchandising
income, and the other events in May, August and October will earn $1,600, $1,800
and $1,300 respectively.
a) You are required to prepare a cash flow budget. Read the instructions and using the
template provided complete the cash flow budget.
Budgeting Exercise - Cash flow forecast template
# Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Opening 50,00 5,000 (8,000) (21,000 9,800 (3,200) 32,900 19,900 56,900 108,20 95,200 126,00 113,00
Balance 0 ) 0 0 0
Income
Ticket 285,0 65,000 70,000 85,000 65,000

Sales 00
Merchan 1,300 1,600 1,800 1,300

dising
6,000

2019
Page 24 of 59
ASSESSMENT TOOL
Govern 50,000
ment
Grant 50,00
0
Total 391,0 5,000 -8,000 45,300 9,800 71,600 32,900 69,900 143,70 108,20 161,50 126,00 113,00
00 0 0 0 0 0
Expendit
ure
Salaries 120,0 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
00
Casual 2,500 2,500 2,500 2,500

wages
10,00
0
Office & 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000
Admin
Expense 36,00
s 0
Expense
s
Travel & 14,000 14,000 14,000 14,000

Transpor
t 56,00
0
Venue 6,000 6,000 6,000 6,000

Hire
24,00
0
Total 246,0 13,000 13,000 35,500 13,000 35,500 13,000 13,000 35,500 13,000 35,500 13,000 13,000
00
Closing 145,0 (8,000) (21,000 9,800 (3,200) 32,900 19,900 56,900 108,20 95,200 126,00 113,00 100,00
Balance 00 ) 0 0 0 0
b) ou are to present clear and logical recommendations on the cash flow budget to
management. The report should discuss the outcomes of the cash flow forecast and identify
areas for improvement and new approaches to the budget.
Guide: Medium to Long)
Solutions for high cost on salary we will put some more casual staff on the month that
have event and decrease full time employees on that period. In addition, do more
advertising and promote our company to increase Merchandising.

2019
Page 25 of 59
ASSESSMENT TOOL
Travel & Transport was too expensive should try to use public transport.
2.4. Case Study

Read the case study and complete as indicated.
Below are the actual figures for Walters Restaurant for the last six months.
You are to investigate the figures for trends and for any figures that appear to not be
correct.
# July Augus Septembe October Novembe December Total

t r r
Income
Sales of food 63,525 61,525 60,258 59,125 58,656 55,562 358,651
Sales of Alcohol 22,630 22,634 23,653 24,526 25,851 26,861 146,155
Coffee 10,946 10,856 10,895 11,856 9,456 10,512 64,521
Total income 97,101 95,015 94,806 95,507 93,963 92,935 569,327
Expenses
Food Purchases 30,654 31,324 29,586 33,076 31,657 30,285 186,582
Alcohol Purchases 10,213 10,583 12,682 13,694 14,896 15,854 77,922
Wages 20,856 19,856 18,956 20,859 25,532 26,859 132,918
Superannuation 1,929 1836 1753 1929 2,361 2,484 12,292
Rent 2,000 2,000 2,000 2,000 4,000 2,000 14,000
Other 13,125 13,563 13,221 13,681 14,874 12,980 81,444
Total Expenses 78,777 79,162 78,198 85,239 93,320 90,462 505,158
Alcohol profit 12,417 12,051 10,971 10,832 10,955 11,007 68,233
Net profit/loss 18,324 15,853 16,608 10,268 643 2,473 64,169

2019
Page 26 of 59
ASSESSMENT TOOL
Write a report on financial data above giving detailed answers to the following questions.
Back up your answers with example figures and calculations to show the trend and mistake
or areas of concern.
a) Identify a possible logical error in expenses
b) Identify one positive trend in the figures that makes the profit higher as the month
passes
c) Identify three negative trends in the figures that are causing lower profits as the month
passes
d) Study the alcohol purchases for the six months and discuss any concerns you have!
Outline some possible causes for these results!
a) Identify a possible logical error in expenses: Rent is error in November as it should be the
same amount every month
b) Identify one positive trend in the figures that makes the profit higher as the month passes:
A positive trend will be sales of alcohol. It is going up every month
c) Identify three negative trends in the figures that are causing lower profits as the month
passes:
Three negative trends are sales of food, Alcohol purchases, wages
d) Study the alcohol purchases for the six months and discuss any concerns you have!
Outline some possible causes for these results!
Alcohol sales is going up but we have been spending lots of money to purchase to make a
little more sales so we were spending more to make less.
Your assessor will provide you with feedback on your assessment task and your presentation. You
must ensure to print this checklist, have it completed and signed by your assessor and upload the
fully completed checklist with your assessment. Your task will not be marked if this checklist is not
completed.

2019
Page 27 of 59
ASSESSMENT TOOL
ASSESSOR OBSERVATION CHECKLIST
Did the student demonstrate the following: Satisfactory Not Satisfactory
Use effective communication skills such as giving and ☐ ☐

receiving feedback, asking questions, listening to others
Used inclusive body language and made everyone ☐ ☐

comfortable
Ability to use technology skills to prepare and present ☐ ☐

PowerPoint slides
Used effective presentation skills ☐ ☐
Ability to hold a meeting to discuss changes to income and ☐ ☐

expenses with appropriate colleagues
Ability to consult with and inform all relevant personnel of the ☐ ☐

importance of budget control and monitoring
Presented appropriate knowledge and understanding in ☐ ☐

budget resource allocation
Feedback on presentation from the assessor:
Outcome:  Satisfactory  Not Satisfactory`
Assessor Signature: Date:

2019
Page 28 of 59
ASSESSMENT TOOL
ASSESSMENT TASK 3: PREPARE AND MONITOR BUDGETS

Assessment type:
 Case study, report and practical activities

 This is the third assessment task which consists of case studies, report and practical
activities.
 In this task, you are required to demonstrate your ability to complete a comparative
balance sheet and gain an understanding of how to prepare budgets. You can do this in
consultation with your assessor who will provide you with feedback. Once you have
completed the tasks, discuss your answer with your assessor.
 The presentation is timed and you will be allocated 10 to 15 minutes to conduct the
meeting. Students answers must be in the student’s own words to demonstrate their own
understanding of each individual question.

business’ needs

2019
Page 29 of 59
ASSESSMENT TOOL

Short 30+ words
Medium 100+ words
Long 200+ words
Activities:
3.1. Prepare a balance sheet for the year ended 30 June 2009 for TML Ltd. Refer to the
additional information provided to complete the balance sheet.

2019
Page 30 of 59
ASSESSMENT TOOL
TMH Ltd. Comparative Balance Sheets for years ending 30 June 2008 and 2009
2009 2008
($) ($)
Student’s ID:
ASSETS Salinee Khanthawa 44207
Current Assets
Cash 119,000 46,000
Accounts Receivable 124,000 134,000
Inventory 155,000 176,000
Total Current Assets 398,000 356,000
Non-current Assets
Land 140,000 140,000
Buildings 415,000 290,000
Less Accumulated (120,000) (105,000)

Depreciation
Total Non-current Assets 435,000 325,000
Total Assets 833,000 681,000
LIABILITIES
Current Liabilities
Expense Payable 124,000 124,000
Account Payable 197,000 197,000
Total Current Liabilities 321,000 321,000
Non-current liabilities
Long-Term 264,000 139,000

Borrowings
Total Non-current 264,000 139,000

Liabilities
Total Liabilities 585,000 460,000
OWNER’S EQUITY
Ordinary Share Capital 45,000 45,000

2019
Retained Earnings 203,000
Page 31 of 59 176,000
Total Owner’s Equity 248,000 221,000

ASSESSMENT TOOL
Additional Information:
 Profit for year ended 31 June 2009 was $94,000
 Cash received from customers totalled $330,000
 Cash paid for inventory totalled $170,000
 Cash paid for expenses totalled $20,000
 Dividends paid during the year were: $67,000
 During the year, accounts receivable decreased by $10,000
 Cost of new buildings acquired during the year $125,000
3.2. You are now required to analyse the balance sheet utilising both vertical and horizontal
ratio analysis. Document your answer in the space below.
(Guide: Short to Medium).
Vertical analysis 2009 assets $833000/liabilities $585000x100 = 1.42 The company has
enough equity to cover the debt 1.42 times.
Horizontal Analysis Equity $248000/$221000x100 = 1.2 increase in equity from 2008 to

2009
3.3. Once the above statements are completed, you are required to further analyse the
company’s performance by comparing the above data with company goals as stated below and
explain how the company goals have varied from the actual data.
Your calculation should be based on the balance sheet figures where any missing sales and
profit information would be supplied by your assessor!
(Guide: Medium).
TMH Management had the following aims for 2009:

• To reduce liabilities by 5%
• To increase profits by 8%
• To increase sales by at least 5%
Were these goals met or the company failed to achieve them?
Decrease liabilities by 5% 2009 target 460000-5% = $437000 Actual liabilities were $585000.
Target not met by $148000
3.4. Case Study

2019
Page 32 of 59
ASSESSMENT TOOL
You manage a small event management company. The business is growing steadily and you
have decided to develop a budget to help plan for future growth.
Over the past year, sales have been increasing by 6% per quarter, with the most recent
quarterly sales being $48,000. Your objective is to grow the gross profit by 8% per quart
higher than this projection offers.
Expenses for the last quarter have been as follows:
 Staffing (two staff) = $18,600
 Telephone/Internet = $680
 Rent = $3,600
 Advertising = $1,250
 Equipment Hire = $8,400
 Event catering = $13,850
Without any major changes, you are projecting that sales will continue to increase by 6%
per quarter, with equipment hire, event catering and telephone/internet expenses rising by
4%.
Instructions to students
You will be required to prepare a budget, finalise a budget, monitor and review the budget.
This task must be undertaken individually and presented professionally to your assessor.
The report must also be word processed and not hand written. You will have dedicated
time given to you by your trainer and assessor to complete this task.
a) Develop a report that includes the following information:
 What are your company’s objectives?
The objective is to grow the gross profit by 8% per quart higher than this projection
offers.
 What budgets will you need to prepare?
Sales budget and Expense budget
 What information will you use to develop a budget?
We will use information from previous quarter budget
 Explain what internal and external factors might impact on the budget?
Increase in costs, government increase the minimum wages, environmental
conditions and supply issues.
 Explain how you will involve your colleagues in the budget planning process.

2019
Page 33 of 59
ASSESSMENT TOOL
We will have regular meeting and discuss if the draft budgets is realistic or needs to
be changed.
b) Calculate the next four quarterly budgets based on the prediction that the sales would
increase by 6% per quarter and the relevant expenses would increase by 4% per quarter.
c) Develop a second set of quarterly budgets where the profit is 8% higher than the projected
figures above. The relevant sales and expense figures should be revised accordingly to
achieve this goal.
d) Once you have developed the budget, you are required to monitor and review the budget.
By the end of the first quarter you can see that your actual sales grew by only 4% and
expenses were as follows:
 Staffing = $22,400
 Telephone/Internet = $580
 Rent = $3,600
 Advertising = $1,650
 Equipment hire = $9,800
 Event catering = $14,250
Prepare a variance calculation report showing the actual and budgeted profit and loss
figures for the first month, the favourable or unfavourable variance amounts and
suggestions for corrective actions everywhere necessary.
(Guide: Medium to Long).
See Excel sheet Task Q3.4 for B,C and D

2019
Page 34 of 59
ASSESSMENT TOOL
ASSESSMENT TASK 4: PREPARE AND MONITOR BUDGETS

HOTEL FUTURA
Assessment type:
 Scenario and practical activities

 This is the fourth assessment task which consists of a scenario and practical activities. In
this task you will be required to refer to the scenario and spreadsheet for the Hotel Futura
and complete the activities relating to the scenario.
 You will also be required to meet with the management team and discuss, monitor and
review the budget.
 This task is untimed. Students answers must be in the student’s own words to demonstrate
their own understanding of each individual question.

business’ needs

2019
Page 35 of 59
ASSESSMENT TOOL

Short 30+ words
Medium 100+ words
Long 200+ words
Activities:
4.1. Hotel Future Budget Forecast – read the scenario below and complete the activity.
Refer to the completed spreadsheet submitted by students and compare with the completed
Spreadsheet supplied as part of the Marking guide for this task
(Task 4.1-Hotel Futura Budget Forecast_MG)
Scenario
You are a manager working for Hotel Future. After attending an executive meeting, you are

2019
Page 36 of 59
ASSESSMENT TOOL
required to complete a draft budget based on information and factors that were determined
at the executive meeting at Hotel Futura.
You have met with the department heads of Hotel Futura and the following details have been
discussed to prepare your draft budget for 2018:
1. Rooms Division:
a. Due to renovations the rooms available have been reduced to 96%.
b. The forecasted occupancy rate has been adjusted to 80%.
c. The revenue per available room needs to be increased to $150.00
d. The COGS will increase to 15% of total room revenue
e. Staff costs need to be increased to 20% of total room revenue to allow for
increases in superannuation and awards.
f. Other Expenses need to increase to 8% of total room revenue to cover electricity
price rises.
2. Catering:
a. The food revenue will be increased by 15% due to a new marketing campaign and
specialty menus
b. The beverage revenue will increase by 8%.
c. Staff costs need to be adjusted to 44% of the total food budget.
d. Other Expenses will need to be increased to 7%.
3. Banquet:
The Banquet Division will be directly affected by the new marketing campaign which
has been directed at daytime seminars and corporate functions. For this purpose, the
kitchen has received specialised equipment including multiple combi steamers, hold-o-
mats and sous-vide equipment.
a. The new food revenue budget was set at $ 2,000,000.00 ($2 Million) and the
beverage revenue was increased by 75%.
b. The COGS will increase to 26%.
c. The staff costs have been reduced to 19%.
d. Other Expenses will need to increase to 14%.
4. Room Service:
a. The room service revenue from food needs to be increased by 15%.
b. Due to a different system to clear floors and organise delivery, the staff costs will

2019
Page 37 of 59
ASSESSMENT TOOL
be reduced to 34%.
5. Mini Bar:
The mini bar budget remains unchanged and increased staff costs are absorbed
through different processes.
6. Bar Budget:
a. The food revenue budget has been increased by 25% with the implementation of a
Tapas Menu.
b. The Beverage Revenue budget has been increased 20% with the introduction of a
new cocktail bar and happy hour specials.
c. Staff costs will need to be adjusted to 36%.
d. Other Expenses need to be increased to 18%.
A. Access the excel spreadsheet named “Task 4.1-Hotel Futura Budget_Forecast”. The first tab
on this spreadsheet is labelled “Departments Small” and shows the existing budget figures
for the 2017 financial year. See complete Excel sheet 4.1
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
each department. See complete Excel sheet 4.1
Refer to the completed spreadsheet submitted by students and compare with the completed
Spreadsheet supplied as part of the Marking guide for this task
Task 4.2- Budget Futura_Restaurant_Bar_MG). The tables below are extracted from the
Spreadsheet.
4.2. Read the scenario below and complete the activity.
Scenario
You have provided the Chief Financial Controller with the draft budget for 2018. 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 Futura Restaurant and Bar during 2018.
A. Access the excel spread sheet named “Task 4.2-Budget Futura_Rest.&Bar”. The first tab on
this spreadsheet is labelled “Futura Restaurant and Bar” and shows the Draft budget
figures for the 2017 financial year.

2019
Page 38 of 59
ASSESSMENT TOOL
B. Use the template “Revised Budget” on the second tab of the spreadsheet and perform the
calculations below using basic formulas based on the following changes: See complete Excel
sheet 4.2
Month Customer numbers Average Spend (Food) Average Spend (Beverage)
January 1850 $ 45.00 $ 9.70
February 2000 $ 37.00 $ 9.70
March 700 $ 42.00 $ 9.70
April 1200 $ 48.00 $ 9.70
May 1200 $ 36.50 $ 9.70
June 600 $ 35.00 $ 9.70
July 950 $ 34.00 $ 9.70
August 800 $ 38.00 $ 9.70
Septembe $ 9.70
r 900 $ 29.00
October 650 $ 29.50 $ 9.70
November 980 $ 35.50 $ 9.70
December 2200 $ 48.00 $ 9.70
a) Calculate the anticipated Food revenue for each month and the yearly total.
Month Customer numbers Average Spend Food Revenue
January 1850 $45.00
February 2000 $37.00
March 700 $42.00
April 1200 $48.00

2019
Page 39 of 59
ASSESSMENT TOOL
May 1200 $36.50
June 600 $35.00
July 950 $34.00
August 800 $38.00
Septembe
r 900 $29.00
October 650 $29.50
November 980 $35.50
December 2200 $48.00
See Excel task 4.2 -Budget

Total Futura_Rest.&Bar
b) Calculate the anticipated Beverage revenue per month and the yearly total.
Month Customer numbers Average Spend Beverage Revenue
January 1850 $9.70
February 2000 $9.70
March 700 $9.70
April 1200 $9.70
May 1200 $9.70
June 600 $9.70
July 950 $9.70
August 800 $9.70
Septembe 900 $9.70

2019
Page 40 of 59
ASSESSMENT TOOL
October 650 $9.70
November 980 $9.70
December 2200 $9.70

c) Calculate the Total Revenue for each month and the yearly total.
Custome
r Average Food Beverage
Month numbers Spend Revenue Revenue Total
January 1850 $45.00
February 2000 $37.00
March 700 $42.00
April 1200 $48.00
May 1200 $36.50
June 600 $35.00
July 950 $34.00
August 800 $38.00
Septembe
r 900 $29.00
October 650 $29.50
November 980 $35.50
December 2200 $48.00

2019
Page 41 of 59
ASSESSMENT TOOL
See Excel task 4.2

-Budget
d) 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 Overheads
January
February
March
April
May
June
July
August
Septembe
r
October
November
December

e) Calculate the profit for each month and the yearly total.

2019
Page 42 of 59
ASSESSMENT TOOL
Turnover Total Profit Overheads
January
February
March
April
May
June
July
August
Septembe
r
October
November
December
See Excel task 4.2

-Budget
f) Calculate the Cost of Goods Sold for food and beverages, given a combined percentage
of 32%.
Turnover Total COGS - Food & Beverage
January

2019
Page 43 of 59
ASSESSMENT TOOL
February
March
April
May
June
July
August
Septembe
r
October
November
December

g) 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 Costs
January
February
March
April

2019
Page 44 of 59
ASSESSMENT TOOL
May
June
July
August
Septembe
r
October
November
December
See Excel task

4.2 -Budget
Futura_Rest.&B
Total ar
h) Calculate the ‘Other overheads” for the operation.
Month Overheads COGS - Food & Beverage Staff Costs Other Overheads
January
February
March
April
May
June
July

2019
Page 45 of 59
ASSESSMENT TOOL
August
Septembe
r
October
November
December
See Excel task 4.2

-Budget
Futura_Rest.&Bar
i) Print a copy of the revised budget.

Refer to spreadsheet and compare See Excel task 4.2 -Budget Futura_Rest.&Bar
j) Print the revised budget showing all formulae used.
Refer to spreadsheet and compare See Excel task 4.2 -Budget Futura_Rest.&Bar
4.3. Read the following 3 scenarios and answer the questions attached for each scenario.
Scenario 1:
The finance team has created budget forecasts for Hotel Futura 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.
a) What could be the reasons for this? List 5 examples of areas you would investigate and
explain why.
(Guide: Medium to Long).
5 examples of areas to investigate

- The whole price of beverage
- beverage wastage and pour drink portioning
- staff make mistake when take order or pour drink

2019
Page 46 of 59
ASSESSMENT TOOL
- Report stock beverage

- breakage of beverage
Read the scenario below and complete as indicated.
Scenario 2:
Hotel Futura 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
b) List 5 external factors which could contribute to this and explain which methods you would
use to determine this.
(Guide: Medium).
The contrary patterns in the outcomes got have been seen because of following not many
elements which can be resolved as under:
1.Consumer slant – The factor is related with the financial components and changes in the
Australian economy because of which individuals will feel certain about buying the results
of the café and visiting the lodging. The powerless buyer portion is a fine illustration of
how the variables impact the down stick of deals in the inn business.
2.Disposable pay – The ascent and fall in the discretionary cash flow of the shoppers
which speaks to the manner in which customer needs to spend its pay in the inn industry
is a major factor for assurance of patterns in the business. The blend of shopper’s
assumptions with that of extra cash will be a central point in deciding the pattern of the
clients for going through their cash in the inn industry (Chenhall and Moers, 2015).
3.Strength of dollar – In the ongoing perceptions it was seen that numerous worldwide
organizations and partnerships pointed to money developments as the significant purpose
behind missing the half yearly estimates of long term. The equivalent has been seen on
account of Hotel Futura where the money development and vacillations has been a basic
factor in assurance of the example of the income. The income conjecture of the
organization has encountered inverse patterns and this might be because of the rate
changes in cash. 4.Economic approaches and government enactments – The assurance of
the monetary arrangement of the public authority of Australia and the connected
principles and enactment concerning cordiality industry will likewise be a central point for
perceiving the pattern in inn industry. The public authority has made some severe
arrangements with respect to the generosity of organizations working in the inn industry

2019
Page 47 of 59
ASSESSMENT TOOL
and the equivalent has influenced the strategies of the inns which brought about low
incomes. The expense for giving the offices grown up essentially brings about exorbitant
costs for the items and in this manner inverse patterns are perceived (Jermias, 2017).
5.Competition – The opposition winning in the inn industry has encountered an intricate
pattern in the ongoing half year and the rates for the items must be controlled to stay
serious on the lookout. For a similar explanation the income of the organization has
encountered a converse pattern in expansion in the incomes and financial plans.
The technique which will be appropriate here will be capital planning which will include
figuring of future outcomes for the financial plans arranged by the organization. In the
assurance of these elements different cost constituents will be dealt with and the outside
variables will be appropriately perceived to decide the right figures of the proportions.
Read the scenario below and complete as indicated.
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 Variance
Kitchen/Food Cost 28% 32% (-)$ 13467
b. 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.
a) Which reports would you need to prepare for these issues?

(Guide: Medium).
We should prepare such as Stock report that we can control the ordering to not over
budget that we can save a lot of money for long term. Moreover, about wastage
report we know where is that issue happened so we can reduce wastage and save
cost.

2019
Page 48 of 59
ASSESSMENT TOOL
b) Who is it essential to involve when these matters need to be discussed?

(Guide: Medium).
Accountant, F&B mamager. bar manager, head chef and hotel manager.
c) Suggest options to address and rectify these issues.

(Guide: Medium).
We will do stocktaking to keep an accurate track of the physical stock we have,

what’s been sold, and what hasn’t. It’s all about comparing the physical stock to what
the report says then finding any discrepancies. This will help prevent product
shortages and allow you to keep just enough inventory without having too much in
the warehouse. For the kitchen and food cost, the variance is -$13,467. To save cost,
we will check the price from another supplier if they can make it cheaper. Moreover,
create menu that relate with in seasoning vegetable.
d) How could the cash flow issue be addressed?

(Guide: Medium).
To fix the cash flow issue as the problem was we are order too much bottles. So we
will discuss with supplier if they can take half of the stock back and we will create
promotion such as order any steak dishes with wine in special price.
4.4. Based on the type of budget and data provided to you, you are required to complete the
following activities:
a) Consult with the relevant staff such as department heads, events manager) directly
affected by the budget on the components to be included in the budget. This requires a
written report of the details that were discussed including a detailed analysis of the
factors that impact on the particular budget. For the purpose of this activity, your
assessor will act as the relevant staff. (Guide: Long).
Review the budget by department heads, events manager. Ask them to show where
the budget fits into and supports all department as well as the interdependencies
with them. There may be times when another department can give suggestion all
improvement. Therefore, we need everyone to agree with the budget.
Internal factors that may affect budget
• Financial resources like funding, investment opportunities and sources of
income.

2019
Page 49 of 59
ASSESSMENT TOOL
• Physical resources like company's location, equipment, and facilities.

• Human resources like employees, target audiences, and volunteers.
External factors that may affect budget
• Market Conditions The economy and current market conditions
• Legislative Changes
• Economic situation
• Laws
• Technological factors
• Customer demands
• Competition
b) Following your consultation, you are required to complete a draft budget which reflects
the details you have provided in your report. Attach a copy of the budget. (Guide: Short)
See excel sheet attachment
c) Present the draft budget to the staff (your assessor) you consulted on the budget
components. Provide details of feedback and changes that were requested. This needs
to include the why’s and how’s. Document your feedback below. (Guide: Medium).
The budget for kitchen should be increase due to drought and bushfires make a
disruption in the supply chain that will lead to increase in the wholesale price of foog.
Drinks budget stays the same for purchases, but sales budget will decrease due to
errors on POS system that make customers getting charged the incorrect prices. F&B
manager must have approval from operation maneger for all drinks purchases
over$1500.
d) Based on the feedback received, complete the final budget. Obtain approval of the
relevant department head(s), financial officer or person in charge of the organization
(your assessor). Attach a copy and the signed, approved budget. (Guide: Short)
The final budget has been approved from the operation manager and it’s good to be
implemented.

2019
Page 50 of 59
ASSESSMENT TOOL
e) You are required to monitor the budget against performance at intervals as instructed,
this may be e.g. weekly or monthly and include the relevant reports and actions taken
for each review during the budget cycle.
Each change actioned taken as a result of underperformance must be documented and
signed by the authorised person in the workplace. Explain how you are going to achieve
this?
Supervisor must to sign for allow to change the budget and getting approval by
director or manager. When you have an operating budget, it is essential that you
monitor and analyses the actual performance of your department against the budget
projections.
The first step is to determine if the budget was unrealistic or if the performance of the
department needs to improve, or both.
Auditing generally involves checking financial records to determine their accuracy.
Auditing a budget is more specific, it involves checking to see if the figures represent
a realistic view of the store's operations.
The bigger the organization the bigger the budget. The bigger the budget, the more
potential there is for incorrect estimates in the budget figures. This situation makes
auditing the budget harder, particularly if the data is incomplete, missing or
unavailable.
(Guide: Long).

2019
Page 51 of 59
ASSESSMENT TOOL
f) On completion of the budget cycle, explain how you can review and analyse the
changes in internal external environment and make necessary adjustments to assist in
future budget preparation. Use the space below to explain in your own words. (Guide:
Medium)
 The internal environment is very much associated with the human resource of
the business or organisation, and the manner in which people undertake work
in accordance with the mission of the organisation. To some extent, the internal
environment is controllable and changeable through planning and
management processes.
 The external environment, on the other hand is not controllable. The managers
of a business have no control over business competitors, or changes to law, or
general economic conditions. However, the managers of a business or
organisation do have some measure of control as to how the business reacts to
changes in its external environment.
To adjust the budget we will check at the end of the month where we can reduce
expenses on unnecessary items, modify business practices, recalculate budgeted
numbers or adjust budget targets depending on the cause of variances also updating
manual as required as part of the budget process to record any changes and new
information that will improve the budget process in the future.
The assessor must complete the checklist below. Students are to print, organise to have this
checklist completed and then upload the checklist with the assessment task. The assessment task
will not be assessed unless this checklist is attached.
Satisfactory /
Not Yet Satisfactory
Did the student demonstrate the following?
Yes No

2019
Page 52 of 59
ASSESSMENT TOOL
Effective communication skills to discuss budget requirements  

and seek and provide feedback
Ability to liaise and negotiate with colleagues on potential  

complex and conflicting budget requirements.
Draft budgets that meet organisational objectives and interpret

and analyse financial information from forecasts and previous  
performance data
Developed financial estimates and scenarios using complex  

calculations
Feedback to student
Outcome:  Satisfactory  Not Satisfactory
Assessor’s signature: Date:

2019
Page 53 of 59
ASSESSMENT TOOL
ASSESSMENT TASK 5: MANAGE FINANCES WITHIN A BUDGET

Assessment type:
 Practical activities

 This is the fifth assessment task which consists of practical activities.
 In this task you will be required to refer to the projected data sheet for reference provided
and demonstrate how you can manage finances within a budget.
 You will be using the spreadsheet to complete the required calculations.
 This task is untimed. Students answers must be in the student’s own words to demonstrate
their own understanding of each individual question.

business’ needs

2019
Page 54 of 59
ASSESSMENT TOOL


Short 30+ words
Medium 100+ words
Long 200+ words
Activities:
5.1 In this task you are provided with an excel file with 2 spread sheets (Budgeted Rooms Revenue
Sheet, Actual Rooms Revenue sheet) with the actual figures on the rooms for a given quarter.
You are required to calculate the actual revenue that has been generated for each month in the
given quarter based on the actual occupancy rate.
Calculate the following details using the appropriate sheet as per the given instructions
a) Budgeted Rooms Revenue Sheet
In this sheet first calculate the total projected/forecasted revenue per room type for all 365
days. (Guide: Short)

2019
Page 55 of 59
ASSESSMENT TOOL
Room Total
Type Rooms
Available
King
Suite 20
Queen
Suite 10
Deluxe
Room 50
Standar
d Room 40
Total 120
b) Budgeted Rooms Revenue Sheet
Forecast room revenue = number of rooms x forecasted occupancy x average room rate x
operating days per year. See excel sheet T5 Budget for detailed answer.
 You are also required to calculate total projected/forecasted revenue per room type
for each month for Jan, Feb and Mar.
Forecast room revenue = number of rooms x forecasted occupancy x average

room rate x operating days per year. See excel sheet T5 Budget for detailed
answer.
 Calculate the total rooms for each month –
See excel sheet T5 Budget for detailed answer.
 Calculate the Total Revenue for all room types for each month –
 Calculate the total projected revenue for 3 months (Jan, Feb and Mar)
c) Actual Rooms Revenue Sheet

2019
Page 56 of 59
ASSESSMENT TOOL
In this sheet you are provided with the Actual occupancy for each month.
 Calculate the Revenue per room type for each month (Jan, Feb and Mar)
Forecast room revenue = number of rooms x forecasted occupancy x average room rate x
operating days per year. See excel sheet T5 Actual for detailed answer.
 Calculate the total rooms for each month
See excel sheet T5 Actual for detailed answer.
 Calculate the Total Revenue for all room types for each month
 Calculate the total revenue per room for 3 months (Jan, Feb and Mar)
 Calculate the Variance for each room type for each month (Note before you can do
this calculation you have first calculated the budgeted rooms revenue for each
month as instructed above using the Budgeted Room Revenue sheet)
Variance = Budgeted room revenue for each room type – Actual room revenue.
 Calculate the variance %
variance % = Variance x 100 / Budgeted room revenue. See excel sheet T5 Actual
for detailed answer.
When you complete this activity your assessor will be required to complete the following checklist.
You will not be able gain outcome for this assessment task unless your assessor completes this
checklist. The checklist must be uploaded with the assessment task.

2019
Page 57 of 59
ASSESSMENT TOOL
Satisfactory /
Not Yet Satisfactory
Did the student demonstrate the following?
Yes No
Ability to identify budgetary challenges and develop different options

☐ ☐
for their resolution
Ability to identify budget deviations and deficiencies and develop

☐ ☐
options for meeting budgetary requirements.
Ability to invite and coordinate the input of others in the organisation,

☐ ☐
and provide direction on budget management.
Ability to access and sort all information required for budget

☐ ☐
preparation
Ability to interpret business and financial documents. ☐ ☐
Ability to document clear recommendations based on budget

information and reports.
☐ ☐
Ability to discuss budget requirements and seek and provide
feedback.
Ability to interpret and use budget figures in day-to-day work

☐ ☐
operations
Ability to calculate budget estimates and scenarios for performance

☐ ☐
improvement
Ability to identify budget deviations and deficiencies and develop

☐ ☐
options for improved budgetary performance.
Ability to discuss desired budget outcomes with team members and

☐ ☐
provide direction on resource use.
Ability to use accounting software packages. ☐ ☐
Outcome:  Satisfactory  Not Satisfactory
Assessor’s signature: Date:

2019
Page 58 of 59
ASSESSMENT TOOL

2019
Page 59 of 59

Assessment Tool: Assessment Task 1: Knowledge Questions

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Assessment Tool: Assessment Task 1: Knowledge Questions

Uploaded by

Copyright:

Available Formats

ASSESSMENT TOOL

Qualification: SIT501416 Diploma of Hospitality Management

Students – please ensure

ASSESSMENT TASK 1: KNOWLEDGE QUESTIONS

Purpose of the assessment

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

Benchmark for Assessment

Students may provide the following examples

1 Invoice In financial accounting, a sales invoice (or invoice) is a document

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

protection for both sellers and buyers.

3 BAS Statement A Business Activity Statement (BAS) is a form issued by the

4 Balance Sheet a company's balance sheet provides information on what the

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

Event budgets A budget is a detailed forecast of what will be happening

Project budgets The Project Budget is a tool used by project managers to

Purchasing budget A purchases budget contains the amount of inventory that a

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

for the following year

Master budget the aggregation of all lower-level budgets produced by a

1.3. Explain the following accounting terminologies used in budgeting.

Students may provide the following examples

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

BAS/ GST End of financial year

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

how performance is expected to improve or deteriorate.

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

 financial information from suppliers

Financial Records Purpose

1 Bottom-up Bottom-up which requires every detail of the project to be

4 Three point 3-Points is a procedure that includes individuals that are

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

(Guide: Short to Medium)

1. Emergency purchases which may be due to upsets in production program, slackness

2. Use of substitute material of different prices

Management When a business eliminates layers of management during its

Human resources It prevents over hiring. It helps organizations understand their

Legislation and Certain legislative changes have a direct impact on budget

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

not taken effect, will disrupt current budget projections

Competitor research Competitive research is a field of strategic research that specializes

Declared commitments Declared commitments in areas of operation: upcoming events,

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

 Review your strategic plan for the company.

Organisational budget Business transactions, is that of preparing a budget. A budget is a

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

Item July August

Budget Actual Variance Budget Actual Variance

Sales 230,000 225,000 5,000U 230,000 228,000 2,000U

Tour Costs 85,000 87,000 2,000U 85,000 86,000 1,000U

Tour 14,000 15,000 1,000U 15,000 15,000 0

Labour 77,000 82,000 5,000U 78,000 82,000 4,000U

Fixed Costs 35,000 35,000 0 35,000 35,000 0

Total Costs 211,1 219,000 8,000U 213,000 218,000 5,000U

Profit 19,000 6,000 13,000U 17,000 10,000 7,000U

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

business run longer.

Declining Sales Revenue

HD_4.2_SITXFIN003_ SITXFIN004 Assessment Tool Version 3 Issued 8 May

ASSESSMENT TASK 2: MANAGE FINANCES WITHIN A BUDGET

Assessment task description: