Having completedthefirstactivity,youhavenowbeenaskedtoworkwithahospitalityand catering start-up business that your firm has just taken on as a client. The business is particularly in need of support and guidance with budgeting and how it can be used toinformefficientresourceallocationandsupporteffectivecontrolanddecisionmaking.

Thefounderofthebusinessisinvesting100,000oftheirowncapitalandhasalso secured a business loan of 50,000.

(Note: You will be provided with raw budget data in spreadsheet format, whichyou will then manipulate and model.)

Youhavebeenaskedtoprepareamemorandumthatincludesthefollowing.

• Productionofa12-monthcashbudgetthatmakesuseofvarianceanalysistoshow the impact of the different individual scenarios below:
  1. discountingpricesby20percent,whichinturnincreasessalesvolumeper month by 10 per cent
  2. increasing the marketing budget by 10 per cent per month, which in turngeneratesanadditional20percentinsalesrevenue
  3. offeringsuppliersone-month'stradecredit
  4. reducingrental/propertyrelatedcostsby15percentpermonth.