INTRODUCTION: 

The company's owners gave us their actual financial results for the first quarter of the financial year.
They gave us the tools we needed to establish a budget. The provision provided and the figure
provided were used to produce the drafted- budget . After being presented to the owner, the draft
budget was changed into the final one based on their comments. Since it was applied, the first
month of quarter is now complete. This report analyses both favourable and Non-favourable
financial elements of business, and it makes recommendations for future budget management and
financial stability.

FAVOURABLE AND NON-FAVOURABLE ASPECTS-

FAVORABLE ASPECTS: There were three positive aspects, including food sales, beverages sales, and
function sales, with differences of $78610, $61440, and $97500 (15.19%, 15.36%, and 21.37%),
respectively, from the previous quarter's budget. In addition, there was a total revenue variance of

.NON-FAVOURABLE ASPECTS:

The main unfavourable variations found were in the food-cost, and beverage-cost,wages-base
categories. They have variance values of $10956, 8315, and 2493. Total operating expenses for the
month of October also varied negatively, coming in at 22514, or 12.59% higher than the budget for
the previous quarter.

Recommendation:
Renegotiate with supplier: Australia is facing massive increase prices of raw material which is
massively impacted food industry. Taking its toll on raw material price has gone up and customers
are finding it a rip off when we ask them to pay more money for same product. Therefore, it is
enviable to bring down the prices of raw material so that we are able to retain customer rather than
losing them to competitors. thus, we can negotiate with the supplier to provide off on bulk orders.

Find new supplier: another method to bring down the raw material prices is to switch to a new
supplier which will provide the best deal available to the business and this will help to increase the
profit margin. there is also a possibility that the previous supplier will reconsider the pricing list after
losing a potential customer. hence it will open the doors to more affordable and profitable deal for
restaurant.

Hiring of staff: To regulate the expenses on wages it is imperative to re-assess the rostering and staff
schedules. We will closely monitor the trends of busy and quiet business hours and then schedule
the staff accordingly and thus preventing over staff ratio .it will help in controlling expenses.

Report
Since the second quarter of the financial year has already ended, this is the final version of the
budget variance report. The goal of this report is to compare and contrast the December real
outcomes with the December budget results.

October recommendation:
Following negotiations with the suppliers and a change in suppliers, the cost of food decreased by
7.8% in November and by 18.45% percent in December. Additionally, the cost of beverages dropped
by 15.79% percent in November and 23.52%in December.

FAVOURABLE VARIANCE
Cost of food: The predicted cost of food was $38000 in the budget, while the actual cost was
$39815; this is an increase of 4.56 percent. The expected factor that would increase food prices is
inversely correlated with the revenue generated from the sale of these foods.

Drink prices: - The projected cost of beverages was $18067, however the actual cost was $16,458, or
9.77% less than the budgeted amount. This can be the result of a rise in the volume of beverages
sold.

Salary: The salaries were $ 73,000 when we first started working on the budget, but they are
currently $72,984. This is a constant decrease0.02%,which is not a very large percentage.

Non-Favourable Variances:
Food sales: The budget for food sales was set at $ 73589, while the actual amount was $73,984; this
is an increase of 0.53 percent.

Beverage sales: The projected revenue from beverage sales was $58 500, while the actual amount
was just $54 996, a decrease of 6.37percent.

Function sales: The budgeted amount for function sales was $88,167, while the actual amount was
$76,536. This is a decrease of 15.20 percent in comparison to what we anticipated.

Reasons for Budget Variances

I suggested that these charges be reduced after discovering that the price of the food and drinks was
much higher than usual in the months of October and November. The cost of the mentioned things
decreased as a result of the proposal, which is the fact.

In terms of marketing, the number of agreements made during the month of October was very high
in comparison to those made during the months of November and December.

Staff Training: We had to raise the pay for this quarter since we required more employees because
we have a lot of customers during the Christmas quarter of the year. Around that period, there was
a rise in wages since it was necessary to spend money on hiring more people and paying their
salaries.

Areas for Improvement:

As a result, the areas in need of improvement should be primarily focused on increasing the
company's overall revenue or sales. It is possible to run successful advertising campaigns for the
business. On the weekends and other days when the business is closed, people may be invited to
celebrations and activities in order to boost sales.
 Budget Management Report
Introduction :
Regular examination is required to see whether the expenditure plan is still appropriate. Each
fluctuation must be combined and studied. The increase in estimates, the decrease in clients, and
the changes in activities all point to the need for ongoing revisions and updates to the expenditure
plan.If an important incident occurs, there is no reason to adhere to the previous spending plan and
make ridiculous efforts to stick to it. The budget should be evaluated frequently to make sure that it
takes both internal and external changes into account, as well as the repercussions of those changes.
This will guarantee that the budget is suitable and current at all times.

Any of the providers' prices that have seen a significant increase, in addition to the costs incurred by
such providers in comparison to the quality of the products they provide, need to be investigated.
The most important thing to keep in mind is to make certain that the services you provide are of a
high quality and that the products you sell are of a high quality as well. Instead of using the out-of-
date data from the beginning of the year, you should keep a record of any adjustments that are
made to the budget. This allows future budget plans to be based on the most recent information
available, rather than the information that was available at the start of the year. You need to make
sure that you order all variances that are identified during the year, in addition to any alterations
that are required, so that the budget may be updated. Any information that you get over the course
of your test and exams must be compiled and filed away in the office of the owner or the money
division for future reference.

Definition of budget management:

The executives a financial plan is an analysis of income and expenses over a predetermined future
timeframe. It is normally integrated and re-assessed on an intermittent premise. the executives a
financial plan is an analysis of income and expenses over a predefined future timeframe.

Budget Management Approaches

Reducing cost:
1. Advantages It will be helpful in estimating the cost of hosting various types of feasts as well as
occasions and capacities.

2. Normal adjustments are required for the drawback standard prices

3. Cutting costs in a way that might mislead customers could have an impact on the quality of the
food that they get.

Reducing staff or evolving roaster:

1. The benefit it might provide to the company is that it will be able to lay away

cash since the expenditure to offer salaries will be reduced.

2. A drawback If the company reduces the number of employees, it will cause

the remaining employees to experience increased levels of stress, which in turn

will cause stress among the remaining employees.

3. An effect reduction in employees may cause delays in food orders, services,

and a great many other things, all of which will have an impact on the customers.

Reviewing activity techniques:

1. Advantage: It ensures coherence in the way duties of employees are presented.

2. The inconvenient and inappropriate lack of maintenance that is performed on the functioning
system in the firm

3. To have an impact and complete amazing surveys, we need great partners that can help us cope
with wonderful assistance. By conducting inspections, we get better familiar with the areas of the
company that have room for development.

Importance of budget monitoring:

Checking spending is an essential part of any company's operations to guarantee that all the
financial, operational, and capital plans that have been formulated are being carried out.
Maintaining the sense of responsibility that comes with spending money is one of the things that is
perhaps the most vital in a company. If you arecurrently dealing with any responsibilities, this will
keep you out of financial trouble and maybe assist you in working to better manage them. It is useful
in organising the expenditures.

Recommendation
One of the most important records that a company keeps is its expenditure plan. Because of this, I
would propose that before you establish the spending, you should first create some spending goals
that are realistic. Do not construct the revenue statistics if there is no plan in place to make any
changes to the company's operations. It is also important to differentiate between fixed and variable
costs. Every company has certain expenses that don't vary no matter what, while others do, and
those that do fluctuate are often proportional to the amount of revenue generated by the company.
One should also continue to check for sufficiency in the financial plan since, at the end of each
period, your income should have the ability to cover all your costs. This means that oneshould
continue to check for sufficiency in the financial plan