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 price 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%.

Task:

Required:

• Allocate funds to the month of July.
• Prepare an actual budget for the month of July.
• Compare the actual budget prepared with the forecasted budget given in the case study.
• Identify the significance of variation (If the variation is favourable/unfavourable).
• Identify changes in income and expenditure.

Follow the template provided below and perform calculations in MS Excel.

	July (Budgeted)	July (Actual)	Variance	Variance percentage	F/UF
	$
Revenue
Food sales	58,400	62,488	4,088	7%	F
Beverage sales	120,000	128,400	8,400	7%	F
Tab commission	24,650	24,650			UF
Total revenue	203,050	215,538	12,488	6.15%	F
Cost of sales
Food purchases	20,440	22,192	1,752	8.57%	F
Beverage purchases	48,000	50,076	2,076	4.3%	F
The total cost of sales	68,440	72,268	3,828	5.6%	F
Gross profit	134,610	143,270	8,660	6.43%	F
Expenses
Accounting	1,350	1,350	0		UF
Advertising/promotions	1,950	2,950	1,000	51.3%	F
Bank charges	3,790	3,790	0		UF
Cleaning contractor	3,220	3,220	0		UF
Commission credit card	380	380	0		UF
Small equipment replacement	410	410	0		UF
Insurance	910	910	0		UF
Laundry	170	170	0		UF
Legal fees	640	640	0		UF
Licence fees & permits	490	580	90	18.37%	F
Motor vehicle expenses	250	250	0		UF
Maintenance	2,110	2,110	0		UF
Printing & stationery	400	400	0		UF
Rubbish removal	250	250	0		UF
Communication	1,000	1,000	0		UF
Training & development	590	590	0		UF
Wages & on-costs	96520	96,520	0		UF
Utilities	6,000				F
Total expenses	120,430				F
NET PROFIT	14,180				F