Scenario - Additional Information

1. 12 months after the preparation of the annual budget, you are now required to complete a performance report and some detailed analysis for Coffee Ramp so that the budget can be again prepared for the following year.
2. In your meeting with Charlie, he advised you that a competing coffee shop opened opposite Coffee Ramp at the end of the third quarter and he can see that there has been a drop in sales which he believes has resulted from his regular customers trialling the new shop.
3. Charlie has provided you with the following actual data that he has collected from his accounting system:

Coffee Ramp Budget Table

Quarterly income statement for the year ended 30 June 2024

Items	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	2023/24 Full Year Actual
Sales	105,432	64,322	44,980	79,800	294,534
Less Cost of Sales	42,175	25,620	18,765	34,522	121,082
Gross profit	63,257	38,702	26,215	45,278	173,452
Gross Profit %	60%	60%	58%	57%	59%
Less operating expenses:	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	2023/24 Full Year Actual
Permanent Staff Wages	9,128	9,128	9,128	9,128	36,510
Casual Staff Wages	17,821	10,872	7,603	13,489	49,785
Advertising	375	375	375	375	1,500
Rent	5,150	5,150	5,150	5,150	20,600
Administration	3,625	3,625	3,625	3,625	14,500
Utilities	1,463	1,463	1,463	1,463	5,850
Insurance		3,887			3,887
Accounting Fees	500	500	500	500	2,000
Depreciation of Equipment	1,375	1,375	1,375	1,375	5,500
Total operating expenses	39,436	36,375	29,218	35,104	140,132
Net profit	23,821	2,327	-3,003	10,174	33,320
Net Profit %	23%	4%	-7%	13%	11%

1. Prepare Performance Report

• Using FNSACC523_AE_Sk2of3_Appx1_Coffee Ramp_Budget and Performance Report_template EXCEL template found in FNSACC523_AE_Sk2of3_Appx_1_Templates.zip prepare a Performance Report for 2023/24.
• This Excel Spreadsheet should include all appropriate formulas and calculations including links across worksheets.

Coffee Ramp Budget
Quarterly Budgeted Income Statement
Year ___________
	2023/24 Full Year Budget	2023/24 Full Year Actual	Variance Analysis			Comment/Recommendation
			$ Change	% Change	Favourable/Unfavourable
Sales	314,600	294,534	-20,066	-6%	UF
Less Cost of Sales	126,610	121,082	-5,528	-4%	UF
Gross profit	187,990	173,452	-14,538	-8%	UF
Gross Profit %	60%	59%	N/A	-1%	UF
Less operating expenses:
Permanent Staff Wages	36,210	36,510	300	1%	UF
Casual Staff Wages	47,550	49,785	2,235	5%	UF
Advertising	1,500	1,500	0	0%
Rent	20,600	20,600	0	0%
Administration	14,500	14,500	0	0%
Utilities	5,820	5,850	31	1%	UF
Insurance	3,793	3,887	95	2%	UF
Accounting Fees	2,000	2,000	0	0%
Depreciation of Equipment	3,208	5,500	2,292	71%	UF
Total operating expenses	135,180	140,132	4,952	4%	UF
Net profit	52,810	33,320	-19,490	-37%	UF
Net Profit %	17%	11%	N/A	-5%	UF

Coffee Ramp Performance Report
Strategies
Sales Strategies
Risks
Recommendations
Budget Process Suggestions

1. Provide recommendations and strategie

• Using FNSACC523_AE_Sk3of3_Appx3_Skyward_Budget_Report_Presentation_template found in FNSACC523_AE_Sk2of3_Appx_1_Templates.zip, present the following:
  • Provide Charlie with some strategies to cope with the decrease in sales.
  • Identify any potential risks and corresponding recommendations to manage these risks
  • Provide Charlie with recommendations and strategies for improving and ensuring effective budgeting processes.

To complete this task successfully, the student must submit:

• A completed EXCEL Spreadsheet for the FNSACC523_AE_Sk2of3_Appx1_Coffee Ramp_Budget and Performance Report_template found in FNSACC523_AE_Sk2of3_Appx_1_Templates.zip including variance analysis calculations and commentary

A completed FNSACC523_AE_Sk3of3_Appx3_Skyward_Budget_Report_Presentation_template found in FNSACC523_AE_Sk2of3_Appx_1_Templates.zip including suggested strategies, an outline of potential risks and budget process recommend

Appendix 3: Coffee Ramp Strategic Analysis

Strategic Analysis Coffee Ramp

SUGGESTED SALES STRATEGIES

POTENTIAL RISKS

RECOMMENDATIONS TO ADDRESS POTENTIAL RISKS

RECOMMENDATIONS TO IMPROVE BUDGET PROCESSES