Your Role Roberta is an old family friend and knows that you are studying semester. She has asked for your help in explaining the budget and cost analysis report and preparing a report to the General Manager. During a detailed phone conversation with Roberta, you gather the following information about the Kitchen's costs and activities over the last quarter: Kitchen labour, raw ingredients and kitchen supplies are 100% variable based on the number of meals served. Water and electricity are 40% fixed and 60% variable. All other costs are fixed. During the quarter Roberta replaced some small equipment that had been affected by water damage in last year's flooding. Although Roberta had advised management about the timing of these purchases and provided the relevant quotes, only a quarter of the total cost had been included in her budget for this quarter. Allocated administrative costs relate to head office and are allocated evenly across each location and each service. The budgeted rate per hourfor kitchen labour was $10 and the kitchen staff were expected to produce 20 meals per hour. The added demand for meals outside of the kitchens usual hours led to overtime increasing the average cost per hour to $10.50 over a total of 1,036 hours. Raw ingredients were budgeted at $6/kilogram; however, after negotiations with her main suppliers, Roberta was able to reduce the average cost per kilogram to $5.75. Roberta ran a very tight kitchen, each kilogram of raw ingredients was expected to produce 15 meals, and there was no change to this over the quarter. Background Founded in 1978, Green Day Shelters is a not-forprofit organisation that provides free hot meals and short-term accommodation to those in need across NSW. Their mission is to provide a friendly face and a helping hand to those who have stumbled along their life journey. Green Day has grown significantly over the last decade, and now operates seven shelters. Each location has two operational supervisors, one for the accommodation, and one for the kitchen. The kitchen serves meals between the hours of 12pm and 2pm, and 5pm to 7pm every day, but Roberta often stays open longer to make sure no one misses out on a meal. While on average the kitchen serves 200 meals a day, demand is much higher in the winter months when temperatures are low, and many come in to make use of the free warm showers. Over the last two years, the shelter has seen a steady increase in demand for both meals and accommodation due to the pandemic which has led seen an increase in unemployment and homelessness across the region. Green Day receives income from government grants and fundraising; although, the pandemic has reduced the organisation's ability to raise funds. This has put additional pressure on Green Day's bottom line and ability to continue operating at a surplus. Quarterly Budget Actual Performance Cost Variance % Variance Number of Meals served 18,250 22,800 4,550 25% Costs: Raw ingredients 7,300 un 8,740 -$ 1,440 20% Kitchen labour 9,125 S 10,878 -$ 1,753 -19% Kitchen supplies 1,003 $ 1,340 -$ 337 -34% Water and electricity 2,190 $ 3,110 -$ 920 -42% Insurance 320 320 - 0% Small equipment 300 1,200 -$ 900 300% Kitchen manager salary 7,500 S 7,500 $ 0% Allocated administrative costs 4,000 in un 5,000 1,000 -25% Equipment depreciation 1,250 S 1,250 Totals $ 32,988 $ 39,338 -$ 6,350 -19%