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Unit: SITXFIN004 Prepare and monitor budgets
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Course Code SIT50416 Course Name Diploma of Hospitality Management (Cookery)
Unit Code SITXFIN004 Unit Name Prepare and monitor budgets
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Course Code and Name: SIT50416 Diploma of Hospitality Management (Cookery)
Unit Code: SITXFIN004
Unit Title: Prepare and monitor budgets
Assessment 1
Your task: Answer each question below.
1. Name 4 business considerations you might consider when researching a budget.
2. Describe how the following sources of data can be used for budget preparation.
Competitor research –
Customer or supplier research –
Declared commitments in areas of operation –
Financial information from suppliers –
Financial proposals from key stakeholders –
Performance data/information from previous time periods –
Departmental, event or project budgets –
Grant funding guidelines or limitations –
Management policies and procedures –
Organisational budget preparation guidelines –
3. Explain how the following internal¬ factors can impact on budgets.
Management restructure –
Human resources requirements –
New projects and business objectives –
Changes in commodity or service prices –
4. Explain how the following external factors can impact on budgets.
Legislation and regulations –
Changes in the global economy –
Market trends –
5. How does involving staff “from the bottom up” in the budgeting process, help the business?
6. What does the process of preparing a draft budget usually involve?
7. How does breaking the budget down into groups, departments, or income and expense categories help colleagues?
8. Name 3 people (job roles) you would circulate the draft budget to for feedback or approval:
9. The budgeting process requires strong negotiation skills. Why is it important to convince staff of the achievability of the budget?
10. A staff member suggests a change or alteration to the budget. List 3 aspects you need to consider to ensure any changes would have no negative impacts:
11. In most businesses/industries, when must the budget be complete?
12. What information should department managers include in their monthly reports?
13. How often should the budget be compared to the actual accounting results?
14. Name and describe 5 financial reports you might generate from your accounting system to check your budget against actual income or expenditure.
15. Every revenue and expense item on the Profit and Loss Statement should be compared to what?
16. When revenue variances occur, why is talking to staff a good way to help identify and find options to address the issue?
17. List 3 factors that can cause variances in staff budgets.
18. Why is monitoring your budget progressively throughout the year so important?
19. How can you collect information to help create future budget plans?
20. Name an accounting program you can use to help manage budgets.
21. Explain each of the following types of budgets:
Cash budget/Cashflow budget –
Departmental budget –
Event budget –
Project budget –
Purchasing budget –
Sales budget –
Wage budget –
Master budget –

Course Code and Name: SIT50416 Diploma of Hospitality Management (Cookery)
Unit Code: SITXFIN004
Unit Title: Prepare and monitor budgets
Assessment 2 - Task 1
Your Tasks:
You are required to complete a draft budget based on information and factors that were determined during an executive meeting at Hotel Futura.
A. Access the excel spreadsheet named “Task 1-Hotel Futura Budget_Forecast”. The first tab on this spreadsheet is labelled “Departments Small” and shows the existing budget figures for the 2016 financial year.
B. Use the template “Draft Budget” on the second tab of the spreadsheet and perform the calculations below using basic formulas.
Your forecast needs to include the Dollar Figures and the % values for these affected by changes outlined below.
The % values must be listed for each expense item shown in the Expenses Analysis for each department.
You have met with the department heads of Hotel Futura and the following details have been discussed to prepare your draft budget for 2017:
1. Rooms Division:
a. Due to renovations the rooms available have been reduced to 96%.
b. The forecasted occupancy rate has been adjusted to 80%.
c. The revenue per available room needs to be increased to $150.00
d. The COGS will increase to 15% of total room revenue
e. Staff costs need to be increased to 20% of total room revenue to allow for increases in superannuation and awards.
f. Other Expenses need to increase to 8% of total room revenue to cover electricity price rises.
2. Catering:
a. The food revenue will be increased by 15% due to a new marketing campaign and specialty menus
b. The beverage revenue will increase by 8%.
c. Staff costs need to be adjusted to 44% of the food budget.
d. Other Expenses will need to be increased to 7%.

3. Banquet:
The Banquet Division will be directly affected by the new marketing campaign which has been directed at daytime seminars and corporate functions. For this purpose the kitchen has received specialised equipment including multiple combi steamers, hold-o-mats and sous-vide equipment.
a. The new food revenue budget was set at $ 2,000,000.00 ($2 Million) and the beverage revenue was increased by 75%.
b. The COGS will increase to 26%.
c. The staff costs have been reduced to 19%.
d. Other Expenses will need to increase to 14%.
4. Room Service:
a. The room service revenue from food needs to be increased by 15%.
b. Due to a different system to clear floors and organise delivery, the staff costs will be reduced to 34%.
5. Mini Bar:
The mini bar budget remains unchanged and increased staff costs are absorbed through different processes.
6. Bar Budget:
a. The food revenue budget has been increased by 25% with the implementation of a Tapas Menu.
b. The Beverage Revenue budget has been increased 20% with the introduction of a new cocktail bar and happy hour specials.
c. Staff costs will need to be adjusted to 36%.
d. Other Expenses need to be increased to 18%.

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