Case study: 

Pearl Hotel Melbourne branch has a bistro, sports bar, and a bottle shop. The hotel promotes a sustainable environment and is a perfect place for families that want to spend their holidays and want all the amenities in one place.

The hotel hires two managers that work five days a week, including the weekends. There are two other supervisors as well that work on the night shifts.

As per the previous figures of the organization, the food cost accounts for 35% of the sales. Whereas the beverages account for 40%. The management is unhappy with the outcomes and wants to reduce the figures and are working on/researching new ways to manage and control stock.

To increase sales, the business has started to offer loyalty cards to its customers who will receive a free meal after spending $150 on their loyalty card.

The hotel has the following projected budget for the first quarter of the financial year:

 

	July	August	September	1stquarter
	$	$	$	$
Revenue
Foodsales	58,400	63,875	60,225	182,500
Beveragesales	120,000	123,750	131,250	375,000
Tabcommission	24,650	23,925	23,925	72,500
Totalrevenue	203,050	211,550	215,400	630,000
Costofsales
Foodpurchases	20,440	22,356	21,079	63,875
Beveragepurchases	48,000	49,500	52,500	150,000
Totalcostofsales	68,440	71,856	73,579	213,875
Grossprofit	134,610	139,694	141,821	416,125
Expenses
Accounting	1,350	1,500	2,150	5,000
Advertising/promotions	1,950	2,410	2,150	6,510
Bankcharges	3,790	3,630	3,680	11,100

Cleaningcontractor	3,220	3,720	3,720	10,660
Commissioncreditcard	380	380	380	1,140
Small equipmentreplacement	410	410	410	1,230
Insurance	910	910	910	2,730
Laundry	170	180	180	530
Legalfees	640	180	180	1,000
Licencefees&permits	490	490	490	1,470
Motorvehicleexpenses	250	250	250	750
Maintenance	2,110	2,110	2,110	4,330
Printing&stationery	400	400	400	1,200
Rubbishremoval	250	250	250	750
Communication	1,000	1,000	1,000	3,000
Training&development	590	590	590	1,770
Wages&on-costs	96520	99,450	96,550	292,520
Utilities	6,000	5,800	5,850	17,650
Totalexpenses	120,430	123,660	121,250	365,340
NETPROFIT	14,180	16,034	20,571	50,785

Task 1: Make budget adjustments.

Task context: 

During the first month of the financial year, the following events took place: 

• Due to advertisements, the total sales of the company increased by 7% than projected. 

• Meat prices increase due to natural calamities leading to food accounting for 38% of the total sales. 

• Prices for beers decreased, and the beverages now account for 39% of the total sales. 

• Started promoting bistro and the advertisement cost has increased by $1,000 each month. 

• The government increased the licensing fees in the month of June, and the fees are now $580. 

• Cost of utility increases by 6%.
• Description of the Task:  

This Task requires to allocated budget resources and revise budget for the month of July  

 

	July (Budgeted)	July (Actual)	Variance	Variance percentage	F/UF
	$	$	$	%
Revenue
Food sales	58,400
Beverage sales	120,000
Tabcommission	24,650
Totalrevenue	203,050
Costofsales
Foodpurchases	20,440
Beveragepurchases	48,000
Totalcostofsales	68,440
Grossprofit	134,610
Expenses
Accounting	1,350
Advertising/promotions	1,950
Bankcharges	3,790
Cleaningcontractor	3,220
Commissioncreditcard	380
Smallequipmentreplacement	410
Insurance	910
Laundry	170
Legal fees	640
License fees & permits	490
Motor vehicle expenses	250
Maintenance	2,110
Printing &  stationery	400
Rubbish removal	250
Communication	1,000
Training & development	590
Wages & on-costs	96520
Utilities	6,000
Total expenses	120,430
NETPROFIT	14,180