back ground information

Case Study Overview

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

The following events took place during the May budget period.

? Prices for meat, fruit and vegetables have increased as a result of recent drought in some regions and floods or storms in others.

? Prices for many wines have fallen due to a surplus in the market.

? Beer prices have risen slightly, again due to the drought leading to shortages of ingredients and an increase in government taxes.

? Most utility companies increased prices by 7% at the start of May.

? The local police started a blitz on drink driving in the middle of May with increased police presence in local suburbs and roadside testing of drivers.

? In-house training was provided to key food and beverage staff in April by a coffee supplier. The aim is to increase sales and the quality of coffee served. The training was free of charge as part of a new preferred supplier contract with the coffee supplier.

? A major wine supplier has been running an in-house promotional campaign, with staff training provided to help increase product knowledge.

? The bistro menu changed to the new winter menu on 1 May 20XX. It was heavily promoted in May throughout the hotel and in local community newspapers.

Further Information:

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

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

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

Budgets are developed on a quarterly basis. Each department has quarterly and monthly budget targets. Monthly budgets can be adjusted during a quarterly cycle if circumstances within the department change.

The following events have taken place during the April budget period.

? Prices for meat, fruit and vegetables have increased as a result of recent drought in some regions and floods or storms in others.

? Prices for many wines have fallen due to a surplus in the market.

? Beer prices have risen slightly, again due to the drought leading to shortages of ingredients and an increase in government taxes.

? A major wine supplier has been running an in-house promotional campaign, with staff product knowledge training provided to help increase sales.

? The bistro menu changes to the new winter menu on May 1st. Its introduction is being promoted in April throughout the hotel.

Take the time to read through and interpret the budget templates and reports. Complete the missing information as required.

Jackson Hotel operational budget - June quarter

Jackson Hotel operational budget - June quarter June April May June quarter $ $ $ $ Revenue Food sales 116,800 127,750 120,450 365,000 Beverage sales 240,000 247,500 262,500 750,000 Tab commission 49,300 47,850 47,850 145,000 Total revenue 406, 100 423, 100 430,800 1,260,000 Cost of sales Food purchases 48, 180 49,640 48, 180 146,000 Beverage purchases 84,000 86,625 91,875 262,500 Total cost of sales 132, 180 136,265 140,055 408,500 Gross profit 273,920 286,835 290,745 851,500 Expenses Accounting 2,700 3,000 4,300 10,000 Advertising/promotions 3,900 4,810 4,290 13,000 Bank charges 7,582 7,359 7,359 22,300 Cleaning contractor 7,451 7,451 7,451 22,354 Commission credit card 767 767 767 2,300 Small equipment replacement 833 833 833 2,500 Insurance 1,833 1,833 1,833 5,500 Laundry 347 357 347 1,050 Legal fees 1,280 360 360 2,000 Licence fees & permits 983 983 983 2,950 Motor vehicle expenses 500 500 500 1,500 Maintenance 4.224 4.352 4.224 12.800Laundry JU Legal fees 1,280 360 360 2,000 Licence fees & permits 983 983 983 2,950 Motor vehicle expenses 500 500 500 1,500 Maintenance 4,224 4,352 4,224 12,800 Printing & stationery 800 800 800 2,400 Rubbish removal 500 500 500 1,500 Communication 2,000 2,000 2,000 6,000 Training & development 1,190 1,155 1,155 3,500 Wages & on-costs 193,050 198,900 193,050 585,000 Utilities 12,000 11,647 11,647 35,295 Total expenses 241,941 247,608 242,400 731,449 NET PROFIT 31,979 39,227 48,345 120,051Budget Actual Varian Varian Unfavoura Budget Budget ce ce ble $ $ $ $ $ Revenue Food sales 105, 12 119,83 14,71 114,97 328,50 0 7 7 14 5 0 Beverage sales 89,250 96,390 7,140 91,875 262,50 0 Total sales 194,37 216,22 21,85 206,85 591,00 0 7 11.24 7 0 0 Cost of sales Food purchases 40,953 45,048 4095 9.99 42, 194 124, 10 un Beverage 27,563 30,043 2,480 purchases (9) un 26,775 78,750 Total cost of sales 68,516 |75,091 6,575 202,85 9.59 un 68,970 0 Gross profit 125,85 141,13 388,15 6 12.1 137,88 15282 un 0 Expenses Advertising/Promoti 780 624 ons (156) (20) un 962 2,600 Cleaning contractor 1,490 1,490 0 1,490 4,471 Small equipment 333 393 60 replacement 9.59 un 333 1,000 Laundry 245 232 (13) (5.3) un 245 735 Maintenance 1,493 1,262 231 (15.5) un 1,493 4,480 Printing & 160 195 35 21.9 160 stationery un 480 Training & seminars 408 653 245 60 un 396 1,200 Wages & on-costs 85,901 98,771 12,86 14.98 un 89,345 260,76 9 Utilities 3,441 3,235 (206) (6) f 3,494 10,589 Total expenses 94,251 106,85 12,603 13.4 286,31 un 97,918 NET PROFIT 31,603 34,282 2679 8,477 39,962 101,83 un 4Budget Variance Variance $ $ % Revenue Food sales 114,975 112,676 (2,299) (2) Beverage sales 91,875 90,497 (1 ,373) (1.5) Total sales 206,850 203,173 (3,677) 11-8) Cost of sales Food purchases 42,194 45,865 3,671 8.7 Beverage purchases 26,776 29,399 2,624 9.8 Total cost of sales 68,970 75,264 6,294 9.1 Gross prot 137,880 127,909 (9,971) Expenses Advertisinngromotions 962 981 19 Cleaning contractor 1,490 1,490 0 Small equipment replacement 333 288 (45) Laundry 245 237 (3) Maintenance 1,493 1,329 (164) Printing & stationery 160 114 (45} Training & seminars 396 713 317 Wages & on-costs 89,345 103,283 13,938 Utilities 3,494 3,456 (33} Total expenses 97,918 111,891 13,973 NET PROFIT 39,962 16,018 (23,944) Variance S Variance % Food purchases Fruit & vegetables Dairy products Meat & poultry Fish & seafood Dry goods food Dry goods other Total food purchases Beverage purchases Wine Spirits Beer, ciders packaged Beer keg Soft drinks, juices packaged Post mix Total beverage purchases Total cost of sales Food cost % Beverage cost % Cost of sales % Transcript Budget Month: Manager: Staff issued to: Status of the budget: Will it meet the June quarter: Changes: : Budget targets Performance: Budget targets for May Action items. Contributing factors Person responsible Discussions to be held at the next month's meetingBistro labour budget - June quarter Labour April May June June Quarter expenses Budg Actu Varia Budg Actu Varia Budg Actu Varia Budg Actu Varia et al nce et al nce et al nce et al nce $ $ % $ $ % $ $ % $ $ % Total 9,78 9,78 9,78 9,78 9,78 9,78 0 0 29,3 29,3 salaries 0 0 0 0 0 0 40 40 Total front of 45.0 52,1 (15. 47,3 55,1 (16. 44.8 51,2 (14. 137, 158 (15. house staff 53 71 8) 82 05 3) 04 60 4) 239 537 5) Total kitchen 21,8 26,2 (20. 22,6 27,3 (20. 21,7 26,2 (20. 66,2 79,8 (20. staff 64 37 0) 10 32 9) 70 32 5) 44 01 5) Total wages 76,6 88,1 (15. 79,7 92,2 (15. 76,3 87,2 (14. 232, 267, (15. & salaries 97 88 0) 72 17 6) 54 72 3) 823 678 0) On-costs 9,20 10,5 9,57 11,0 9, 16 10,4 27,9 32,1 (15. 4 83 3 66 2 73 39 21 0) Total labour 85,9 98,7 (15. 89,3 103, (15. 85,5 97,7 (14. 260, 299. 01 71 expenses 0) 45 283 6) 16 45 3) 762 799 (15) Percentage 44.1 50.8 43.1 49.9 45.0 51.5 14.4 of total sales 9 2 9 3 6 0 7 16.5