It is September and the budget is as follows:

	July Budget	July Actuals	August Budget	August Actuals
INCOME
Accommodation	3150	5020	2940	3670
Food	1680	1820	1890	2040
Beverages	1638	1680	1680	1896
TOTAL REVENUE	6468	8520	6510	7606
EXPENSES
Overhead
Stock	1,327	2,100	1,428	2,300
Lease	1,500	1,500	1,500	1,500
Repairs/maintenance	400	600	400	300
Advertising	200	200	200	200
Laundry	800	1,000	800	950
Wages	1,617	1,532	1,628	1,450
Miscellaneous	600	560	600	400
TOTAL EXPEND.	6,444	7,492	6,556	7,100
+/-	24	1,028	-46	506
Cash on hand: start	10,000	10,000	10,024	11,028
Cash on hand: end	10,024	11,028	9,978	11,534

You as the manager and the small order cook have agreed to speak to your fruit and vegetable supplier to see if there are any possibilities of reducing the cost of your purchases. You want to reduce your delivery from 4 days per week to twice a week and rather than telling them what fruit and vegetables you want, you are requesting them to select the best quality for the cheapest price, ie the cheapest on the day.

Also as part of cost savings you have had to make the decision to move away from local suppliers of shelf items such as porridge, flour, herbs and spices, sugar, etc. Now that Costco has opened you have the option of buying in bulk. You have calculated that this will save you approximately $3,000 - $4,000 per year.

1. Enter the above budget income and expenditure amounts for July and August to produce a suitable report.
2. Draft the communication with the supplier outlining your request and ask them to provide you with the best possible pricing structure. You will also need to influence their decision by reminding them that the B&B wants to stay with local producers and their quality is the best. Your communication should be formatted professionally and written clearly and in a suitable language for the audience. Submit this communication to your assessor.

As the manager you have been trying to cut costs in wages by doing the housekeeping yourself during the week and on Saturdays. While you have made savings you have run yourself into the ground and are exhausted. It has also meant that customer service has suffered because you are running from the office to the cabins during the two to three hour cleaning window while customers wait. Sales have been up with accommodation running at 92% occupancy over the past four months. You want to bring the casual housekeeper back in for 7 days per week. This will add approx. $4000 to your monthly expenditure.

3. Draft a communication to Betsy regarding your evaluation of the budget how you are feeling, how in your effort to reduce expenditure, this has caused a slump in customer service, your recommendations for changes to the budget and the impact that the changes will have positive and negative. You will need to influence Betsy so ensure you demonstrate that your month-to-date actuals are ahead of budget and how you are saving money. Include your report in your communication to Betsy.