Much of the work of monitoring finances within a budget is looking for trends and figures that are out of the ordinary in the actual results of the business. Trends in past results give you indications of possible future results in the business. These trends are often not instantaneously obvious when you look at the results; relating figures to each other and expressing those figures as a percentage of each other may uncover a hidden trend in the income or expenses of a business.

 

Take a close look at the actual figures for 2016/ 17 from Fred's Café; calculate the percentages and look deep into the figures for trends and numbers that don't seem quite right and warrant further investigation.

 

1. Which two months had the of lowest rate % of profitability and why?

2.   Explain the main contributing factor to this low profitability and why?

3.   Check and report on the superannuation payments at the current rate of 9.5% (May 2017). Calculate each month and identify the incorrect superannuation % rate

 

4.   Identify a negative trend in sales and discuss a possible reason why?

5.   Identify a positive trend in sales and discuss a possible reason why? 

6.   From the budget figures describe the cost of wages % to the business and describe any fluctuations to the wages cost

 Note:

Give detailed answers to these questions and back up your answers with examples of figures and calculations to show the trend, mistakes or areas of concern. This is a certificate IV unit so make sure your answers are detailed and presented in a professional manner appropriate for a person in a supervisory/management position.

 

 

***Take a look at the budget for Milano café provided below and the actual figures on the following budget completed for the year 2016/17: 

 

1.   Calculate the variances in percentage terms and state if they are favourable or unfavourable (to two decimal places).

2.   Take a close look at the wages and show calculations to show if the actual figures are favourable to the budget estimates or unfavourable to budget estimates when compared to sales.

3.   Take a close look at the food cost and show calculations to show if the actual figures are favourable to the budget estimates or unfavourable to budget estimates when compared to sales.

4.   Take a close look at the beverage cost and show calculations to show if the actual figures are favourable to the budget estimates or unfavourable to budget estimates when compared to sales.

 

 

Milano Café Budget 2016/17
Income	Budget	Actual	Variance % U - Unfavourable F - Favourable
Breakfast - food	$475 000	$502 020
Breakfast - Bev	$22 400	$25 300
Lunch - Food	$620 000	$485 360
Lunch - Bev	$180 500	$135 780
Dinner - Food	$812 000	$835 000
Dinner - Bev	$236 000	$215 120
Functions - Food	$362 000	$450 630
Functions - Bev	$121 700	$210 360
Total	$2 829 600	$2 859 570
Expenses
Purchases Food	$559 000	$620 120
Purchases Bev	$112 000	$152 810
Wages	$854 600	$1 000 180
Superannuation	$81 187	$95 017
Rent	$80 000	$80 000
Marketing	$45 000	$32 300
Waste disposal	$2 900	$3 100
Office supplies	$3 900	$5 100
WorkCover	$16 000	$17 000