Presentation1

AVE-01995 SIMRANDEEP KAUR

•The council announced that it will be increasing their rates for 2019/2020 by 7.75%. Project sales : •Next year the customer’s number will be slightly high and estimated increasing is 5.25%. •Food price will increase 3.5% and beverage prices by 1.5% Cost of goods : •Goods will likely to increase by 6.25% and beverage by 7.75% early in July 2019. •All cost can be reduce by taking some initiative such as reducing waste, better portion control etc. by 3.75%. • Expenses: •Sales turnover for discounts for bulk purchases is 3.5%. •Advertise purpose $3,600 per annum. •1 st of July weekly wage will increase by 2.75% and employee benefits by 2.25% at the same time. •AVETA Café will keep the all variable cost portion in line with current projections. •All current contracts will be subjected to an increase of 4.5%. •The power and phone charge are to be increased by 6.75% from 1 st October 2019. •Interest component for the coming year will be $8,425. •The council announced that it will be increasing their rates for 2019/2020 by 7.75%.

AVETA Café profit/loss statement Item 2018/2019 Budget Increasing percentage 2019/2020 Budget Revenue Food sales $523,500.00 3.5% $541822.50 Beverage sales $282,200.00 1.5% $286433.00 Total $805,700.00 $828255.00 Costs Food costs $175,372.50 6.25% $186332.78 Beverage costs $113,585.50 7.75% $122387.87 Total $288,958.00 $308719.87 Gross profit Food $348,127.50 6.25% $369885.40 Beverage $168,614.50 7.75% $181681.63 Gross profit $516,742.00 $551566.62 Less Expenses Wages $220,842.37 2.75% $226915.55 Employee benefits’ $36,337.07 2.25% $37145.58 Direct operating expenses $35,128.52 No change $35128.07 Music and entertainment $7,573.58 No change $75128.58 Advertising and promotion $24,573.85 No change $24.573.85 Power and phone $15,630.58 6.75% $16685.06 Administrative and general $30, 938.88 No change $30938.80 Repairs and maintenance $19,336.80 No change $19336.80 Total $390,361.65 $465849.68 Less occupation and finance cost Interest $11,924.36 No change $11,924.36 Depreciation $16,275.14 No change $16,275.14 Rates $4,000.00 No change $4,000.00 Insurance $7,440.94 No change $7,440.94 Now the new draft budget for 2019/2020 financial year is as follows: Now the new draft budget for 2019/2020 financial year is as follows:

The formulas that I used to calculate the budget is given below: • Departmental income = Departmental revenue – Departmental expenses • Income before fixed charges = Departmental income – Undistributed operating expenses • Net income = Income before fixed charges – Fixed charges = Income before tax • The formula for establishing net profit is: Sales – Variable costs = contribution margin – fixed costs = Net profit • The BEP in sales dollars can be calculated by using this formula: Fixed costs = contribution percentage *100 • Therefore, to calculate the sales required to generate a certain level of profit, add the amount of profit to the fixed costs in the above formula: Fixed costs + Profit required = Contribution percentage *

its beverage price by 1.5%. Report for expected budget performance It analyses that budget spread sheet mainly shows revenue that is generated from two items that are food sales and beverage sales. In financial year 2018 to 2019, it observed cafe generated sales from food sales is $ 523500; however, from its sale observed from beverage sales is $282,200. In this aspect it examined that cafe is earning more from food sales as its contribution in its earning is accounted as 64.97% while beverage sales accounted as 35.03%. After consulting from head chef, it observed that its sales in the financial year 2019 to 2020 would increase by 5.25%. Regarding this management of the cafe also need to plan to increase its food price by 3.5% while increasing its beverage price by 1.5%.

budget status in relation to targets. activities: • Income and sales records • Expense and purchase records • Bank records ( Deposits, Statements, Summaries) • Tax records (Business activity statements) • Year- end records (Creditors who owe us money, debtors who owe money to). For most restaurant managers it is essential to keep on top of record keeping, reconciling and producing monthly reports. All of this can be done using simple accounting software. Often, a management committee is responsible for ensuring that accurate financial records are kept, that they are complete and accurate. This can include a cash book, receipt book, bank statements and assets register. This enables everyone in the organization to understand budget status in relation to targets.

Month Customer numbers Average Spend Food Revenue January 1850 $45.00 $ 83,250.00 February 2000 $37.00 $ 74,000.00 March 700 $42.00 $ 29,400.00 April 1200 $48.00 $ 57,600.00 May 1200 $36.50 $ 43,800.00 June 600 $35.00 $ 21,000.00 July 950 $34.00 $ 32,300.00 August 800 $38.00 $ 30,400.00 September 900 $29.00 $ 26,100.00 October 650 $29.50 $ 19,175.00 November 980 $35.50 $ 34,790.00 December 2200 $48.00 $105,600.00 Total $557,415.00 ate the anticipated Food revenue for each month and the yearly total .

Month Customer numbers Average Spend Food Revenue Beverage Revenue Total January 1850 $45.00 $ 83,250.00 $ 17,945.00 $101,195.00 February 2000 $37.00 $ 74,000.00 $ 19,400.00 $ 93,400.00 March 700 $42.00 $ 29,400.00 $ 6,790.00 $ 36,190.00 April 1200 $48.00 $ 57,600.00 $ 11,640.00 $ 69,240.00 May 1200 $36.50 $ 43,800.00 $ 11,640.00 $ 55,440.00 June 600 $35.00 $ 21,000.00 $ 5,820.00 $ 26,820.00 July 950 $34.00 $ 32,300.00 $ 9,215.00 $ 41,515.00 August 800 $38.00 $ 30,400.00 $ 7,760.00 $ 38,160.00 September 900 $29.00 $ 26,100.00 $ 8,730.00 $ 34,830.00 October 650 $29.50 $ 19,175.00 $ 6,305.00 $ 25,480.00 November 980 $35.50 $ 34,790.00 $ 9,506.00 $ 44,296.00 December 2200 $48.00 $105,600.00 $ 21,340.00 $126,940.00 $693,506.00 Total $557,415.00 $136,091.00 $693,506.00 te the Total Revenue for each month and the yearly total.

Month Total Overheads January $101,195.00 $ 91,075.50 February $ 93,400.00 $ 84,060.00 March $ 36,190.00 $ 34,742.40 April $ 69,240.00 $ 62,316.00 May $ 55,440.00 $ 49,896.00 June $ 26,820.00 $ 25,747.20 July $ 41,515.00 $ 39,854.40 August $ 38,160.00 $ 36,633.60 September $ 34,830.00 $ 33,436.80 October $ 25,480.00 $ 24,460.80 November $ 44,296.00 $ 42,524.16 December $126,940.00 $114,246.00 $693,506.00 $638,992.86 Total $693,506.00 • Calculate the overheads total for each month (at 90% of turnover for each for each month with 1000 or more customers and at 96% for each month with less than 1000 customers) and the yearly total.

Turnover Total COGS - Food & Beverage January $101,195.00 $ 32,382.40 February $ 93,400.00 $ 29,888.00 March $ 36,190.00 $ 11,580.80 April $ 69,240.00 $ 22,156.80 May $ 55,440.00 $ 17,740.80 June $ 26,820.00 $ 8,582.40 July $ 41,515.00 $ 13,284.80 August $ 38,160.00 $ 12,211.20 September $ 34,830.00 $ 11,145.60 October $ 25,480.00 $ 8,153.60 November $ 44,296.00 $ 14,174.72 December $126,940.00 $ 40,620.80 $693,506.00 $221,921.92 Total $693,506.00 he Cost of Goods Sold for food and beverages, given a combined percen

Turnover Total Staff Costs January $101,195.00 $ 31,370.45 February $ 93,400.00 $ 28,954.00 March $ 36,190.00 $ 12,666.50 April $ 69,240.00 $ 21,464.40 May $ 55,440.00 $ 17,186.40 June $ 26,820.00 $ 9,387.00 July $ 41,515.00 $ 14,530.25 August $ 38,160.00 $ 13,356.00 September $ 34,830.00 $ 12,190.50 October $ 25,480.00 $ 8,918.00 November $ 44,296.00 $ 15,503.60 December $126,940.00 $ 39,351.40 $693,506.00 $224,878.50 Total $693,506.00 • Calculate the staff costs for each month at 31% for each month with 1000 or more customers and at 35% for each month with less than 1000 customers.

: Account for irregular expenses QUESTION/ ANSWER ANS 1. 5 types of budgets for businesses • Master Budget. A master budget is an aggregate of a company's individual budgets designed to present a complete picture of its financial activity and health. • Operating Budget. • Cash Flow Budget. • Financial Budget. • Static Budget. ANS 2. 5 Steps to Budgeting summary statements Step  1: Automate essential, recurring living expenses. Step  2: Automate savings. Step  3: Establish a debt reduction plan. Step  4: Commit to a spending plan. Step 5 : Account for irregular expenses

ANS 3. This process should be carried out at all levels and include any devolved budget elements. ANS 3. • The role and nature of budgets The nature of a budget is to arrange for how cash is to be spent. It is to live inside your methods and to distribute assets accurately. A Budget also known as a financial plan predicts costs and earnings for a precise timeframe. b) Budget formats, budget performance and financial reports A budget is a fiscal plan for a given period of time. Although a variety of budgeting formats exist, this article discusses the four which are the most widely used today - line-item budgeting, program budgeting, performance budgeting, and zero-based budgeting. The Budget Performance and Outlook Report is a quarterly review of the Budget. The aim of the Budget Performance and Outlook Report is to enable the Cabinet, the Legislature and the public to understand and scrutinise how public funds are being spent, increasing transparency and accountability. Financial reports consist of a statement of financial position, statement of comprehensive income, statement of changes in equity, statement of cash flows, notes, directors' declaration, directors' report and the auditor's report. C)Financial reporting procedures and cycles The accounting cycle is a process designed to make financial accounting of business activities easier for business owners. The first step in the eight-step accounting cycle is to record transactions using journal entries, ending with the eighth step of closing the books after preparing financial statements. D) The features and functions of accounting software programs used to prepare and monitor budgets Accounting software programs is a tool to help you record the flow of your company's money and examine your financial condition. With it, you can record transactions, generate reports, manage customer and vendor contacts, create purchase orders, track stock levels, bill customers, and monitor account balances. budget monitoring involves examining monthly monitoring reports and taking action to tackle any significant variances. This process should be carried out at all levels and include any devolved budget elements .