The London Docks Caf

Planning and actual budgets for the month ended September 30^th, 2020

PLANNINGACTUAL

Budgeted meals quantity (q)20 00018 000

Revenues (5.00q)100 00090 000

Expenses:

Raw material (2.50q)50 00045 000

Wages and salaries (5 500+0.25q)10 50010 000

Utilities (2 500 + 0.05q)3 5003 400

Facility rent 5 0005 500

Insurance2 8003 200

Fuel2 5002 800

Net Operating Income25 70020 100

Required:

a)Outline the objectives of budgeting and explain how London Docks Caf benefits from engaging in robust budgetary processes? (15 marks)

b)Report showing London Docks Cafe's revenue and spending variance for September? (20 marks)

c)Based on the variances report you prepared in (b) above, which area/s of activity should be of concern to the management of London Docks Caf? Explain (25 marks)

d)Explain the terms profitability and sustainability. Assess and advise the London Docks Caf on the measures they should adopt to ensure the attainment of both mandates. (30 marks)