Part 1: Research task
Part 1: Research task
For this assessment, you will be required to research the following questions to provide sufficient evidence of your knowledge for this unit. There are word limits to guide your responses, however, these are only a guide. You are required to show that you can locate information that is relevant to your industry, interpret this information and apply it accordingly. Type your answers in the spaces provided.
Below is a diagram that illustrates the budget planning and control process. You are required to prepare a narrative that explains each stage of the control section of this diagram. Your answer should be 50 and 100 words and should adequately explain the key principles of budgetary control.
Figure 1: Budget planning and control process
(Source: Hughes & Kirby, 2019, Prepare Operational Budgets 7E, Learnnow Publications)
Using the information in the table below, demonstrate your understanding of the key principles of budgetary control you explained above by:
Completing the table (calculate percentages to one decimal place).
Table SEQ Table * ARABIC 2: Information table
Account Actual Budget Variance Variance %
Sales 425250 450000 Gross Profit 205650 225000 Net Profit 112350 135000 Evaluating the figures (Your answer should be between 50 and 80 words).
Suggesting one corrective action (Your answer should be between 50 and 80 words).
Chill and Grill Burger Co have provided you with the following data.
Table 3: Results of Market ResearchSummary of questionnaire responsesBurger Would you buy this again?
Yes (Y)/No (N) Would you pay
10% more?
Yes (Y)/No (N) Rate this product
* Terrible
** Good
*** Excellent
Arizona Y Y ***
Bogan Burger Y Y ***
Cheese N N *
Drip n Drool N N *
Elton Y N **
Fire Y Y ***
Grilled classic Y N ***
Hot Chills Y Y ***
Italian sausage N N *
Jalapeno Y N **
Table 4: Actual sales and gross margin for the year ended 30 June 2020Burger Qty sold Unit
Cost
$ Unit Sell
Price
$ Gross Profit
$ Gross Profit
%
Arizona 123,000 4.00 13.95 9.95 71%
Bogan Burger 65,000 8.04 15.50 7.46 48%
Cheese 20,000 5.25 8.50 3.25 38%
Drip n Drool 93,000 3.00 12.50 9.50 76%
Elton 75,000 1.80 3.00 1.20 40%
Fire 125,000 4.25 16.00 11.75 73%
Grilled classic 37,000 4.25 15.00 10.75 72%
Hot Chills 25,000 6.05 14.00 7.95 57%
Italian sausage 140,000 7.50 19.00 11.50 61%
Jalapeno 130,000 4.50 18.00 13.50 75%
TOTAL 833,000
You are required to:
Demonstrate your knowledge of a range of forecasting techniques to Chill and Grill Burger Co by completing the following tasks.
Complete the table below.
Table 5: Forecasting techniques
Forecasting Technique Category Description Was this technique used in Table 3 above? (Y/N)
Linear regression Jury of executive opinion Using the average Customer surveys Salesforce composite Using only the market research data in REF _Ref43364651 h * MERGEFORMAT Table 3: Results of Market ResearchSummary of questionnaire responses, advise Chill and Grill Burger Co which burgers they should consider removing from the 2021 sales mix forecast. Justify your response. Your response should be between 40 to 80 words.
Using the 2020 actual sales and gross profit results provided in REF _Ref43364718 h * MERGEFORMAT Table 4: Actual sales and gross margin for the year ended 30 June 2020 above, and the projections below, prepare a sales and gross profit forecast for 2021 for Chill and Grill Burger Co. Projections provided by management:
For burgers where market research indicates consumers would pay 10% more, increase 2021 unit sell price accordingly.
For all burgers, increase the unit cost price by 5%.
For all burgers, increase quantity sold by 2%.
Table 6: Chill and Grill Burger Cosales and gross profit forecast for the year ended 30 June 2021
Burger Qty forecast Unit
Cost
Forecast $ Total
Cost
Forecast
$ Unit
Sell Price Forecast $ Total
Sales Forecast $ Gross Profit Forecast
%
Arizona Bogan Burger Cheese Drip n Drool Elton Fire Grilled classic Hot Chills Italian sausage Jalapeno TOTAL N/A N/A N/A
Using the forecast you prepared above for Chill and Grill Burger Co, which three burgers would you advise they remove from the 2021 sales mix forecast. Justify your response.
Was your advice to management the same as the qualatitive? Why do you think this was the case? Justify your response with an example from your table. Your response should be between 50 to 80 words.
Dee Dee & Co have collected the following statistical data about their business.
Table 7: Dee Dee & Co statistical data
Financial Year Sales Revenue $ Net Profit $
2013 80000 3350
2014 82500 4400
2015 83200 4500
2016 84000 4000
2017 86500 4200
2018 87000 3800
2019 87450 3000
2020 89520 2900
You are required to use this data to conduct a statistical analysis and measure of variance for Dee Dee & Co.
Table 8: Statistical analysis for Dee Dee & Co.
Financial Year Sales Revenue $ Sales Revenue variance
$ Sales Revenue variance % Net Profit $ Net Profit variance $ Net Profit variance % Net Profit Margin %
2013 80000 N/A N/A 3350 N/A N/A 2014 82500 4400 2015 83200 4500 2016 84000 4000 2017 86500 4200 2018 87000 3800 2019 87450 3000 2020 89520 2900 Demonstrate your knowledge of measures of variance you calculated above by completing the following table.
Table 9: Variances
Variances Was this horizontal and/or vertical analysis? Justify your response
Sales Revenue variance $ 2013-2020 Net Profit variance % Net Profit Margin % Net Profit Margin % 2013-2020 Using key principles of statistical analysis and trend analysis, what can you infer for the 2021 financial year from the statistical data you prepared above? Your response should refer to the trend. Your response should be between 50 to 80 words.
Read the Plan2go policy and procedure on budgeting. Ask your assessor or trainer for a access to a copy of the file.
In your own words describe what this policy and procedure aims to do. Your answer should be between 20 and 30 words.
Is there anything you would expect to see in this policy and procedure that is missing? You might search other organisations budgeting policies and procedures to see what they contain as a comparison. Your answer should be between 30 and 40 words
What are some of the benefits for an organisation when they have these sorts of documents? Your answer should be between 20 and 30 words.
What risks does a business run if they do not have a policy and procedure for budgeting? Your answer should be between 20 and 30 words.
