SITXFIN009 Manage Finances With Budget Assignment
Assignment Task
Description:
This is the second (2) unit assessment task that student has to successfully complete to be deemed competent in this unit of competency.
The student is required to complete six (6) activities.
- Activity 1: Allocate funds to budget
- Activity 2: Discussion with the management
- Activity 3: Budget management
- Activity 4: Discussion with supplier
- Activity 5: Discussion with the purchase manager
- Activity 6: Identify variances and document the outcomes
The student must attempt all criteria to the required level, e.g., Assessment criteria mentioned in the performance checklist to be deemed satisfactory in this task.
Scenario:
Feast of Flavours story
Feast of Flavours was begun when 3 school friends met for a drink, and the idea of opening a world-class restaurant was conceived with a little help from a bottle of Pinot Noir. After 3 years and innumerable ups and downs, Feast of Flavours was born.
Objective
The objective of a Feast of Flavours is to create a culinary experience that gives people the most delicious dining and an unforgettable aftertaste. At Feast of Flavours, customers will discover the flavours of the world as they merge with the essence of unique cultures. An amalgamation of cuisines around the globe under one roof with ambience designed to match the culinary joy. The idea of Feast of Flavours began with creating a tasteful palate for patrons who enjoy exploring and experimenting with flavours.
Menu options
Feast of Flavours menu ranges from a variety of local cuisines from across the globe carefully chosen to be a part of the 3 most important meals – Breakfast, Lunch and Dinner. The restaurant ambience is beautifully crafted with soft lighting, artful elements, and masterpieces. The scrumptious menu is fashioned by the Michelin 3-star chef and his team, including world-class chefs from across the world. At Feast of Flavours, you can also find cocktails and beverages curated to give a worldly experience with each slow slip.
A complete list of the menu options can be located at the Feast of Flavours simulated website
Meetings & Events
Feast of Flavours is acknowledged as an industry leader delivering the best food service to its customer. The restaurant is also equipped to handle private or corporate events like team outings, birthday parties, or special celebrations. Customers can choose from the below options to book for their upcoming event.
- Family Table – seats 10 guests
- Community Table – seats up to 15-20 guests
- Private Dining Room – seats up to 25-30 guests
The restaurant is determined to cater for any customer within 2 minutes of their arrival and serve delicious food and drinks within 15 minutes of the order.
Feast of Flavours has 15 people staff on Friday and Saturday, including 4 chefs, 3 Bar attendants, 3 support staff /kitchen hands, 5 waitresses.
Budget control system followed by Feast of Flavours
Feast of Flavours uses the budget to coordinate and control the financial activities of the business. It analyses its performance by comparing the actual budget with the forecasted budget and then finding the variations and making necessary adjustments by involving the relevant team members. The below-provided image highlights the steps of the budget process followed by the Feast of Flavours.
Training process
Feast of Flavours provides induction and training to all the staff members before beginning their respective roles. The management team members have to clear a knowledge test before commencing their role and after receiving complete training. Once the test is cleared, the respective employee can commence their job role. All employees are provided with three attempts to clear the knowledge test.
Assume that you are working as a restaurant manager in Feast of Flavours, and you are responsible for preparing and monitoring the budgets. You are also responsible for identifying any variance between the actual and the prepared budget and evaluating options to improve budget performance.
You are required to read and understand the given scenarios and visit the simulated business website for Feast of Flavours and complete the below-provided activities
Activity 1: Allocate funds to budget
Additional scenario
As per the previous figures of the organisation, the food cost accounts for 35% of the sales. Whereas beverages account for 40%. The management is unhappy with the outcomes and wants to reduce the figures, and are working on/ researching new ways to manage and control stock. In order to increase sales, the business has started to offer loyalty cards to its customers who will receive a free meal after spending $150 on their loyalty card.
Your Task
In this activity, you will act as the restaurant manager, and the management team wants you to allocate funds to the budget for the first quarter and document in the template provided below.
You are required to perform the following tasks.
- Followed the organisation control system as mentioned in the scenario
- Allocate funds as per the budget requirements and agreed priorities.
- Prepare the actual budget for the first quarter.
- Compare the actual budget prepared with the forecasted budget given in the additional scenario
- Identify the significance of variation (If the variation is favourable/unfavourable)
- Identify changes to income and expenditure
Activity 2: Discussion with the management
Your Task.
In this activity, you will act as the restaurant manager, and you are responsible for communicating the budget with the management and creating awareness about budget control. You are also responsible for identifying the variance in the financial reports and presenting them to the management team.
Two of your classmates will act as the managers from the management team, and they will act as:
- Manager 1: Purchase manager and will ask you about the implications of the budget variations on the restaurant performance.
- Manager 2: Sales manager will ask you the following question: o Are there any significant variances in the sales figures that you should be concerned about? o Are there significant variances in any of the expenses categories that you think should be investigated further?
You are required to engage in discussion with the manager. The managers will listen to you and provide their advice on the current budget performance, and you are also required to obtain suggestions to improve them.
During the discussion, you will be required to:
- Discuss desired budget outcomes to the managers/Present variance reports to managers. (Prepared in activity 1)
- Advise the managers of budget status in relation to targets.
- Identify and present the financial commitments under their correct cost category.
Identify the variable direct cost, fixed indirect cost and variable indirect cost.
- Discuss the changes that occurred due to recent events and the changes that they have made to income and expenditure priorities prior to the implementation of the budget for the second quarter.
- Promote awareness of budgetary control among the management and discuss how the changes in outcomes from food and beverage sales and costs of sales indicated in the variance report impact the restaurant (You must consider the type of deviation (Favourable/Unfavourable) and size of deviation food and beverage).
- Provide explanations for the deviations in food costs and beverage costs.
- Discuss options for managing costs that can be applied in the situation.
- Discuss which costs can be further controlled.
Activity 3: Budget management
Your Task.
In this activity, you will act as the restaurant manager, and you are required to conduct research over the internet and identify new approaches to improve budget performance.
You are required to identify the causes of budget variance and evaluate the options to improve the budget performance based on the activity 1 and 2. You are required to take into consideration the feedback provided by the management team in activity 2.
You are required to perform the following tasks:
- Identify the budget area that needs evaluation
- Identify the causes for the budget deviation
- Evaluate options to effectively manage the identified deviation
- Take into consideration the impact of new approaches to improve budget performance on the colleagues and customer service levels
- Complete the below-provided template
You will be required to complete.
You need to complete the budget performance template based on the instructions provided in the above section and submit the completed template to your Trainer/Assessor.
Your Trainer/Assessor will observe your performance and complete the following performance checklist.
Activity 4: Discussion with supplier
Additional scenario
You were a bit concerned about the rising prices of meat. So, you decided to conduct research to identify the different suppliers that have raised the prices. After your investigation, you identified that there are many other suppliers that can supply similar quality items at lower prices than your current supplier.
Your task
In this activity, you are required to conduct a meeting with your current supplier and discuss with him the issues you are facing due to the increased prices. You are required to negotiate with the supplier and try to convince him to provide you with the goods at a price provided by the other suppliers in the market.
One of your classmates will act as the meat supplier and take part in the discussion. He/she will be determined with the prices and will not agree to change the prices as he believes he is one of the best providers of meat in the market, and the other providers supply the stale meat and use chemicals to make it look fresh.
In the meeting, you are required to discuss the following with the current supplier:
- Negotiate with the supplier to reduce the current prices and keep the prices at the rates that he used to supply earlier
- Provide supplier with information of other providers that supply the products at a much lower price and the same quality
- Explain to him the implication of the raised product price on their budget performance
- Discuss with him your loyalty as a customer towards him from last few years.
- Discuss the benefits of providing the goods at the same price
- Discuss the drawbacks of not providing the goods at the same price.
- Document your discussion in the below-provided meeting minutes template.
You will be required to complete.
You need to perform a role play based on the above-provided instructions and complete the meeting minute template. Submit the completed template to your Trainer/Assessor Your Trainer/Assessor will observe you during the role play and complete the following performance checklist.
Activity 5: Discussion with the purchase manager
Additional Scenario
Based on your discussion with the supplier in activity 4, you have decided to change the supplier as he is not willing to change his prices, and you have identified there are other suppliers who are willing to supply the products at the same rate as before.
Your Task
In this activity, you will act as the restaurant manager and you are responsible for implementing the new approaches for budget management. You are required to conduct a meeting with the purchase manager and discuss the options of the new supplier and the reason for changing the old supplier.
One of your classmates will act as the purchase manager and will participate in the discussion. Purchase managers are responsible for authorising any purchase decisions. He/she will show concern that the changes will have a negative impact on customer service standards and food quality, leading to an increase in customer complaints, and you are required to convince him/her.
During the discussion, you will need to:
- Discuss the budget analysis report prepared in activity 3.
- Discuss the financial benefits that the business will have if they change the supplier.
- Discuss the amount of difference it will make each quarter to the budget if they persist with the existing supplier.
- Inform the manager that there are suppliers in the market that are offering a much lower price for a similar quality product.
- Discuss any disadvantages or concerns related to the identified approach.
- Inform the purchase manager that you have taken into account the impact of the new approach on the colleagues and current service levels as you have inspected the new supplier's product and the product is of the same quality that they are using and thus will not impact the food quality and customer service standards.
- Present the recommendation in a clear and logical manner
You will be required to complete.
You need to perform a role play based on the above-provided instructions and complete the meeting minute template Submit the completed template to your Trainer/Assessor Your trainer/assessor will observe you during the role play and complete the following performance checklist.
Activity 6: Identify variances and document the outcomes
Your Task.
- After your discussion with the purchase manager in activity 5, he/she has agreed to appoint a new supplier.
- As the new suppliers are supplying the products at the same price as the restaurant used to get earlier. The meat price for the month of August and September still remains 35% of the total revenue.
- Some of the events that happened in the first month of the financial year (Refer to activity 1) benefit the business. Some of the expenses are non-controllable, which the restaurant has to pay.
- Using the information provided in activity 1, prepare the actual budget for the month of August and September, identify variances, and document the outcomes in the below provided template.
You are required to perform the following tasks.
- Allocate funds as per the budget requirements and agreed priorities.
- Prepare the actual budget for the month of August and September.
- Compare the actual budget prepared with the forecasted budget.
- Identify the significance of variation (If the variation is favourable/unfavorable)
- Identify changes to income and expenditure
- Follow the organisation control system as mentioned in the scenario