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Prepare and Monitor Budgets
Assessment 1 – Activity A
Assessment 2 – Activity B
Assessment 3 – Activity C
Unit of Competence: SITXFIN004 – Prepare and Monitor Budgets
Throughout this activity, you will prepare a budget for a charity ball according to the requirements provided throughout. You will also be required to:
The structure of this assessment is made up of:
Please read the information provided then complete the tasks as instructed. At the end of the activity, the final excel document should be inserted as an object in the box below.
When using the excel document, all tasks should be completed on the relevant sheet and with the appropriate formulae and interlinks
Please read the following information:
You are currently the Operations Manager in the local Exhibition and Conference Centre, and have been appointed as the Project Manager for organising and running a charity ball. The ball however, will be held next door in the local town hall, as it is beautiful historic building with a large, vaulted ceiling in the main hall. The charity organisation for which you’re running the ball wants a black tie, gala event with music, dancing and entertainment, as well as a charity auction. The ball will be held on the last Saturday in October, and they hope to sell 500 tickets. You are responsible for organising the food and beverages for the night as well as a master of ceremonies, entertainment and music. The charity will source all items for the auction.
The overall goals are to hold a successful event and make a reasonable profit from the ball and the auction to assist them in their charity work. As part of the planning process you must prepare a series of budgets to help achieve these goals. Initially, you need to calculate expenses to determine the final selling price for the ball tickets. An initial estimated figure of $150 to $200 has been discussed. However, you must confirm if this is appropriate and what profits will eventually be donated to the charity as a result. You will report your initial budgets to an event committee comprising of representatives of the charity organisation and upper management.
Answer the questions below. Your answers should relate to the charity event outlined.
Q1: What are the goals and objectives of this event?
Q2: What budgets do you need to prepare to help you achieve these goals? Provide at least 5 answers.
Q3: Please research 4 factors, 2 internal and 2 external, and discuss how they could affect the budget performance.
Q4: What types of data or information do you need to assist in the preparation of your budgets? List 4 examples of types of data required and provide a web link of where you would go for research.
e.g. Prices – food and beverages
Provide link to supplier/pricelist or other source
After conducting extensive research, you have sourced the following information to help you prepare an expenses and labour budget.
You have received quotes from suppliers for the following items in Table A:
Main hall and stage
Event uniforms (F&B only)
Printed event t-shirt for service staff
6 x large stands, 42 x table centres
Lighting and stage hire
Stage, spot, dance floor
Audiovisual equipment hire
Microphones, data projector, screens, sound systems for entertainment
Food preparation and service equipment
Master of ceremonies
6 hours including auction
(Source: Table A)
One of the expenses incurred will be for the hire of linen for the event. Open the excel template provided on page 5 of this assessment, and use the information provided to calculate the linen expenses.
Based on the quotes provided by suppliers above and your linen calculations, prepare an expense budget for the event in your excel document.
All cooks, cooks’ assistants and food and beverage service staff will be hired through a hospitality labour hire company. The costs quoted by the company include all penalties, workers’ compensation, WorkCover and other on-costs. However, there is an additional overtime penalty of $10 per hour for all hours worked after the first eight hours of any given day.
You will need staff over a two-day period:
No. of staff
Rostered hours per person
Pay rate per hour ($)
F&B waiter A
F&B waiter B
(Source: Table B)
In addition to labour hire costs, you employ two supervisors for the event. These are staff you have recruited personally and you pay a flat rate for the two days of $40.00 per hour. You anticipate they will both work 12 hours each day.
Security is also required on the night with two crowd controller/security staff employed through another staffing agency. You will need 24-hour security from 3 pm Friday due to some of the charity auction items being stored at the venue overnight. Their hourly rate is $40.00 on Friday and $50.00 on Saturday and Sunday. All rates are from midnight to midnight.
3 pm to 11 pm
11 pm to 7 am (Sat)
6 pm to 2 am (Sun)
7 am to 3 pm
(Source: Table C)
Using the information in Table B and your excel document, calculate the Total Food and Beverage wage costs incurred from the labour hire company for the event.
Using the information in Table C and your excel document, calculate the Total Labour Costs for the event.
Additional information has now been gathered:
Calculate food costs including food cost per head, assuming 500 customers will buy the tickets and attend the charity ball. Do this in your excel document
Calculate beverage costs including beverage cost per head in the excel document.
The event committee has asked you to prepare two alternative revenue statement budgets. The budgets will be based on two different ticket selling prices: $150.00 or $200.00. They wish to determine the most feasible and profitable alternative for their organisation.
It has also been decided that a specific percentage of ticket sales revenue is to be spent on additional expenses such as advertising, printing, decorating the venue and entertainment expenses for the event. These expenses need to be included in the revenue statement budgets.
% of revenue
Using the information provided, complete the Profit & Loss budget for ticket prices at $150 and $200 in your excel document.
Then answer the following questions:
Q1: Do you think either of the budget options presented meets the charity organisation’s stated goals? Please discuss.
Q2: What recommendations would you make to the event committee to help them achieve their goals?
Now that you have prepared your budget, you need send to your colleagues and manager for their review and input.
Prepare a draft budget email, save a screenshot onto a word document, then insert below.
(Insert as an Object here)
You will need to discuss your results so far with the event committee and negotiate the final budget.
The meeting members will be Chair and Co-Chair of the event committee, you (Project Manager) and the F&B Manager or Head Chef.
You will need to:
Once the meeting is completed, insert your copy of the minutes in the box below.
Meeting agenda template
(Insert as an
Finally, send an email to all required departments after the final budget numbers have been decided on and insert the email below.
Screenshot of email to departments
After meeting with the event committee and discussing potential methods of reducing expenses and maximising profits, the following decisions have been made.
Deposit to secure booking
AV equipment hire
Paid in full on pick-up
Paid in full on delivery
Paid in full on day of event
Balance paid on day of event
$620.90 less returns
Payment in full
Balance paid on return
Outstanding invoices as at 15 November
Invoiced 15.11, yet to be paid
Revenue: ticket sales
Payments still outstanding
One table not paid, invoice outstanding
(Source: Table D)
We must incorporate the changes into our budgets by recalculating or removing the items discussed. The final budget can then be presented to the event committee.
In your excel document, complete the linen and beverage adjustments.
In your excel document, now complete the revenue statement budget based on the $175 ticket price and the new adjustments.
The event has now been completed, so we need to prepare our final profit and loss report to evaluate budget vs. actual. Complete this task in your excel document.
Using Source Table D and the case study update, please complete a cash flow statement in the excel document.
After the event you have to prepare a presentation to the committee on the outcomes of the Gala Ball. This information should be collected and recorded to assist in future budget preparations.
You need to create a Power Point presentation comprising of a minimum 5 slides which demonstrate:
Once completed, insert your Power Point presentation as in object in the box below. Your trainer will complete the observation checklist.
Power Point presentation
Answer the following questions giving as much detail as you can. You must use your own words wherever possible.
Q1: What is a budget?
Q2: Name 6 different types of budgets commonly used in the hospitality industry.
Q3: From the statements below, select those which can be used for budget preparation and monitoring practices and techniques:
Customer or supplier research
Declared commitments in areas of operation
All information from every previous budget available
Financial information from suppliers
Financial proposals from key stakeholders
Income and expenditure for previous time periods
It’s a new budget, so only new information is relevant
Departmental, event or project budgets
Grant funding guidelines or limitations
Only one person should prepare and monitor the budgets
Management policies and procedures
Organisational budget preparation guidelines
Performance information from previous periods
Q4: Explain what ‘financial commitments’ are. You must include 4 examples in your answer.
Q5: What are the three different types of ‘year’ used when preparing budgets? List their names and appropriate time period.
Q6: Provide the definition of a variance in a budget. State 2 forms in which it can be displayed.
Q7: Describe each of the different categories of expenses. Give one example of each category.
Q8: A business wants to calculate food revenue for the month of July based on 75 seats and an average seat turnover rate of 0.75. The average spend per customer is $13.90. What are the total food sales for the 31-day budget period? (You must show your calculations.)
Q9: Last month a business spent $23,379 on food purchases and generated $73,059 revenue. Calculate the food cost percentage. (You must show your calculations)
Q10: What are six costs, other than gross wages or salaries, which should be included when calculating a labour budget?
Q11: List three factors that can affect cash flow in a business
Q12: Why is it important to reflect organisational objectives within the draft budget?
Q13: State whether the following factors that can affect the impact budget development are internal or external.
Internal or external
Growth or decline in economic conditions
Human resource requirements
New legislation or regulation
Organisational and management restructures
Scope of the project
Shift in market trends
Significant price movement for certain commodities or items
Supplier availability and cost
Q14: Name the 2 basic formats that any budget can be prepared in.
Q15: There are different types of forecasters – realists, pessimists and optimists. Explain how a realist would create a budget.
Q16: Why is it important to discuss and negotiate outcomes amongst your team prior to finalising the budget?
Q17: How can you ensure the final budget is completed within designated timelines?
Q18: What are the five steps followed when monitoring and reviewing budgets.
Q19: A business forecasted $250,000 sales but actual sales for the period were $235,200. What is the variance and variance percentage?
Variance $ =
Variance % =
Q20: Are the following deviations favourable or unfavourable results?
1) Wages are $23,000 above budget = F or UF
2) The variance percentage for bus tour sales is 11.2% = F or UF
3) The budgeted figure for cost of goods was 35%. The actual figure for cost of goods for the month is 36.2% = F or UF
Q21: A business’s laundry costs are $1,450 below budget. What is a possible cause for this deviation?
Q22: Briefly explain how the features and functions of accounting software programs assist you in managing budgets.