Assessment 3: Part C – Project

P & L Statement for November 20XX & December 20XX

November December
Details
Budget Actual Variance $ Variance % Budget Actual Variance $ Variance %
Food Sales $71,333 $78,563 $7,230 9.20% $71,999 $73,984 $1,985 2.68%
Beverage Sales $56,160 $58,621 $2,461 4.20% $56,680 $54,996 ($1,684) -3.06%
Function Sales $88,165 $98,565 $10,400 10.55% $88,165 $76,536 ($11,629) -15.19%
Total Revenue $215,658 $235,749 $20,091 8.52% $216,844 $205,516 ($11,328) -5.51%
Operating Expenses
Food Cost $36,700 $44,225 ($7,525) -17.02% $36,800 $39,815 ($3,015) -7.57%
Beverage Cost $17,999 $21,656 ($3,657) -16.89% $18,165 $16,458 $1,707 10.37%
Marketing $3,400 $1,140 $2,260 198.25% $3,800 $980 $2,820 287.76%
Rent $19,440 $18,000 $1,440 8.00% $19,620 $18,000 $1,620 9.00%
Telephones $545 $411 $134 32.60% $550 $489 $61 12.47%
Miscellaneous $1,605 $1,120 $485 43.30% $1,635 $1,365 $270 19.78%
Utilities $3,210 $3,800 ($590) -15.53% $3,270 $3,715 ($445) -11.98%
Wages - Base Salary $71,750 $74,822 ($3,072) -4.11% $71,800 $72,984 ($1,184) -1.62%
Superannuation $7,175 $7,482 ($307) -4.10% $7,180 $7,298 ($118) -1.62%
Total Operating Expenses $161,824 $165,174 ($3,350) -2.03% $162,820 $161,104 $1,716 1.07%
Net Profit or Loss $53,834 $70,575 ($16,741) -23.72% $54,024 $44,412 $9,612 21.64%
% of Budgeted Revenue 24.96% 29.94% 24.91% 21.61%
After the month of October, two changes were made. One was increase in the
marketing budget and 15% increase in the function sales during the peak season in
November and December. It showed a decrease in the variance of operational
expenses.
 The variations at the end of December were as follows:
Favourable Variances:
 Food sales: 1985
 Total Operating Expenses: 1716
 Beverage cost: 1707
 Telephone: 61
 Miscellaneous: 270
 Marketing: 2820
Unfavourable Variances
 Food cost:-3015
 Utilities: -445
 Wages: -1184
 Superannuation: -118
 Beverages Sale: -1684
 Function Sale: -11629
 Total Revenue: -11328

 The reason for continuous variations can be taxes imposed by government,

sudden increase in the price of raw ingredients, seasonal availability of fruits and
vegetables, increase in the prices of fuel or wrong calculations of the expected
budgeted values.
 The budget can be improved by hiring part time employees, using local raw
materials, learning lessons from previous year and previous month budget etc.
 The desired budget outcomes will be managing expenses within the given budget
and reducing negative variances.