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SITXFIN004 | Prepare and Monitor Budgets | Management

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Assessment Task 1

Written Variance Report

A. Summarise the hotel’s performance. (Min. 200 words)

i. Why is the hotel’s profit figure unsatisfactory? State the amounts and variances in dollar and percentage terms.

ii. Were the lower than budgeted revenues the major reason for the profit variance? Discuss.

B. Suggest at least 1 possible reason for each of the following variances. (Min. 500 words)

i. Rooms Revenue

ii. Food Revenue

iii. Beverage Revenue

iv. Cost of Sales Food

v. Cost of Sales Beverage

vi. Payroll Rooms Division

vii. Payroll Food & Bev

viii. Travel Agents’ Commission

ix. Contract Cleaning Food and Bev

x. Credit Card Commission

Better answers will include discussion of how much the expenses above (i.e. iv to x) should have been based upon actual revenues and budgeted percentages. To enable this discussion you will need to calculate cost percentages for both budget and actual.

C. Identify and discuss at least 2 specific changes in the external environment that may have produced the unfavorable profit figure? (Min. 200 words)

D. If you were the General Manager of the Preston Hotel what are at least 6 specific actions you would take when presented with January’s variance analysis? (Min. 300 words)

Answer the next 2 questions, presuming you are the owner of a small restaurant:

E. What are some of the sources of data that you would use when preparing next year’s budget? (Min.200 words)

F. How could you use budgetary information as a motivator for your employees? (Min.200 words)


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