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SITXFIN003

Manage finances within a budget

Assessment: - Project

Context and Conditions of Assessment


This assessment will ensure that the elements, performance criteria, performance
evidence and knowledge evidence required and conditions are adhered to
demonstrate competency in this unit assessment task.
• Read the assessment carefully before commencing.
• This is an open book assessment and will be conducted at Macallan College.
• Your Assessor will use the assessment criteria in this document and will
provide feedback / comment.
• You must answer all the questions in the assessment tasks in your own words.
• Your Trainer / Assessor will inform you of the due date for this assessment
task.
• Your Assessor will grade as either S – Satisfactory or NS – Not Satisfactory for
the assessment. In all cases your Assessor will provide you with feedback.
• Only when all assessment tasks have been graded as S – Satisfactory you will
be deemed C – Competent in the final result of the unit of competency; if you
do not satisfactorily complete all the assessment tasks you will be deemed
NYC – Not Yet Competent.

Re-Assessment Conditions
• If the evidence is graded as NS – Not Satisfactory you will be required to
resubmit the evidence. In this case, you will be provided with clear and
constructive feedback based on the assessment decision so that they can
improve your skills / knowledge prior to reassessment.
• Where a ‘NS – Not Satisfactory’ judgement is made, you will be given
guidance on steps to take to improve your performance and provided the

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opportunity to resubmit evidence to demonstrate competence. The assessor
will determine and discuss the reasons for NS – Not satisfactory on any of the
criteria and will assess you through a different method of assessment e.g.
verbal/oral questioning, problem solving exercises.
• You will be notified within 10 working days of undertaking an assessment of
their result in achieving competency o If a student does not complete the
assessment, they should notify their trainer as to why they did not complete
the assessment and if due to illness, a medical certificate must be produced.
“This process is detailed more in the “Training and Assessment Policy and
Procedure”
o In the above scenario, student will be given an opportunity for
reassessment within 5 working days with no reassessment fee charged.
o Students who are deemed to be Not Yet Competent (NYC) will be
provided with information identifying the areas in which they failed to
achieve competency. Students will then have the opportunity to repeat
the assessment task within 5 working days of notification with no
reassessment fee charged.
o If a student is deemed NYC in the reassessment or if the student did
not approach the MACALLAN COLLEGE within five working days with
a valid reason for not availing themselves of the reassessment
opportunity, then those students will be given a final chance to re-sit the
assessment and will be charged at $200.00.
o After this no further reassessment attempt will be provided to the
student and the student will be required to repeat the whole unit with full
fee for the unit as per the fees policy of the MACALLAN COLLEGE.
The student will be made aware of the impact of repeating the unit may
have on their student visa.
o If a student is found to be cheating or plagiarising their assessment, a
$200.00 reassessment fee will be charged for reassessing the
assessment within 5 working days.
o If the student is found to be plagiarising or cheating again after
conclusion of the Intervention meeting with the Course Co-ordinator,

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the matter will be referred to the CEO / Operation Manager which may
result in the suspension or cancellation of their enrolment
o The MACALLAN COLLEGE has intervention strategies, including
student support services available to enable students to complete
qualification in the expected time frame. Students at risk of not
completing within this time frame are identified as early as possible and
an intervention strategy is put in place.

Macallan College will ensure access to:


• Commercial Kitchen Simulated Environment
• Workplace procedures and instructions relating to safe work practices
• Workplace safety and emergency evacuation procedures
• Hazardous chemicals and dangerous goods information
• Safety materials and equipment relevant to a Commercial Kitchen
• Fire safety equipment First Aid equipment and relevant stock
• Documents for recording workplace safety, accidents and incidents.

Assessment Decision Making Rules


Your assessor will assess the evidence submitted for the following elements,
performance criteria, performance evidence and knowledge evidence to confirm that
the student evidence submitted demonstrates validity, sufficiency, authenticity and
confirms current skills and knowledge relevant to the unit of competency.
Your assessor will be looking for the following in this assessment task: -
• Allocate budget resources.
• Allocate funds according to budget and agreed priorities.
• Discuss changes to income and expenditure priorities with appropriate
colleagues prior to implementation.
• Consult with and inform relevant personnel about resource decisions.
• Promote awareness of the importance of budget control.
• Maintain detailed records of resource allocation according to organisational
control systems.

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• Monitor financial activities against budget.
• Use financial records to regularly check actual income and expenditure against
budgets.
• Include financial commitments in all documentation to ensure accurate
monitoring.
• Identify and report deviations according to significance of deviation.
• Investigate appropriate options for more effective management of deviations.
• Advise appropriate colleagues of budget status in relation to targets.
• Identify and evaluate options for improved budget performance.
• Assess existing costs and resources and proactively identify areas for
improvement.
• Discuss desired budget outcomes with relevant colleagues.
• Undertake appropriate research to investigate new approaches to budget
management.
• Define and communicate the benefits and disadvantages of new approaches.
• Take account of impacts on customer service levels and colleagues in
developing new approaches.
• Present clear and logical recommendations for budget management.
• Complete financial and statistical reports.
• Complete financial and statistical reports within designated timelines.
• Prepare and present clear and concise information to enable informed
decision making.

Assessment Instructions:
1. Answer to the questions in a new word document.
2. Keep simple formatting with 12pt Arial and single line spacing.
3. Upload file to the drop box provided with a name containing your student ID
and unit code such as MACXXXX_SITXFIN003.

Questions

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TASK 1 – CASE STUDY – ANALYSIS on BUDGET
VARIANCE
This task consists of 2 parts, Part A and Part B.
For Part A you are required to complete a budget analysis.
For Part B you are required to answer questions relating to the importance of
monitoring and analysing budgets and identifying methods to rectify shortfalls.

PART A
Top of the Town Hotel has asked you to calculate the variance for the following
figures for the month of July and August. Also calculate the total profit that was
budgeted and actual. Analyse the findings and inform them about the variance as
they are concerned and would like to monitor the income, expenditure, profit levels,
budgetary performance of their Food and Beverage Department.

Item July August


Budget Actual Variance Budget Actual Variance
Sales 230,000 225,000 -5,000 230,000 228,000 -2,000
Revenue
Food Costs 85,000 87,000 2,000 85,000 86,000 1,000
Beverage 14,000 15,000 1,000 15,000 15,000 0
Costs
Labour 77,000 82,000 5,000 78,000 82,000 4,000
Costs
Fixed 35,000 35,000 0 35,000 35,000 0
Costs
Total Costs 211,000 219,000 8,000 213,000 218,000 5,000
Profit 19,000 6,000 -13,000 17,000 10,000 -7,000

The Hotel owners and managers would like to know from you the major areas
of concern where there is a deviation that needs further monitoring and
improvement.
Deals income has diminished, so we want to zero in on showcasing, promotions,
unique offers and compromise with local people. Food cost has expanded, we can

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keep effective and prepared work or staff, or haggle with new providers, change the
menu occasional item. Deal with the piece of stock. Work cost has additionally
expanded so we want worry going to diminish the relaxed work or overseeing staff
and roistering fittingly.

PART B
Questions:
1. Explain the importance to the owners of monitoring budgets and why do
you think it will help them to manage their finances better for the
business.
Monitoring budget is important to determine the cash flow, hence the profit or
loss. For example, in the above table, July month loss is $13000.00 and
august month loss is $7000.00. It requires the owners to provide funding off
$13000.00 in July and $7000.00 in august to balance the books. Insolvent
trading is against the law.

2. Explain to them the use of analysing the monthly budget and comparing
the forecasted budget against the actual budgets.
Analyzing the monthly budget, comparing the forecasting budget against the
actual budgets shows the above case, the business while losing money has
improved its position in reducing its variable costs i.e., food/beverage/ labour
increasing its sales revenue, below budgets in August month.

3. Explain your findings and possible reasons for these variances.


Findings; I observed that august month is more profitable when compared to
the July month. The main difference was between food costs and the labour
costs. In July month food cost and labour, cost variation is $2000 and $5000.
In august month food cost and labour, cost variation is $1000 and $4000. This
shows management has taken steps to restraint of money and checks the
finances.

4. Research and suggest what improvements do you think the owners can
take to improve this situation?
Suggestions and improvement in the current situation by the owners:
Assess the situation

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SWOT analysis
Market research
Benchmarking
Trend analysis
Webinars
Set clear goals-this should be specific, measurable, achievable, relevant and
timely.
Identify strategies for achieving goals
Develop a plan for implementing the strategies
Measure the results- success will help you to keep the plan on the track.

TASK 2 – CASE STUDY – CASHFLOW BUDGET


CALCULATIONS
This task consists of 2 parts, Part A, Part B and PART C.

PART A
Read the following case study and answer the questions that follow:
Jo Swade imports vanilla pods for $8 per kg (including GST). He marks up the pods
by 50% and estimates that he will sell 5000 in January, and that this number will
increase by 30% each month for the next two months. On 1 January, Jo has $1000 in
the bank.
His monthly outgoings (including GST) for operations are expected to be:
• Purchases Assume, Joe buys the exact number he sells each month
• Shop expenses $4000
• Wages $5500
• Rent $2000
• Other costs $4000
• Jo also intends to draw $2500 per month as living expenses
• In February, Joe intends to spend $10 000 on a new computer and shop
fittings.

Prepare a cash budget for Jo for January to March, showing the amounts for each
month and the totals for the quarter

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Jo Swade: Cash budget for three months ending 31 March
January February March Total
Cash in from operations
Kilos sold
5000 6500 8450 19950
Sale price
12 12 12
Cash from sales
60000 78000 101400 239400
Cash out for operations
Kilos purchased
5000 6500 8450 19950
Purchase price
8 8 8
Cash for purchases
40000 52000 67600 159600
Wages
5500 5500 5500 16500
Shop expenses
4000 4000 4000 12000
Rent
2000 2000 2000 6000
Other costs
4000 4000 4000 12000
Total cash out for operations
55500 67500 83100 206100
Other payments
Drawings
2500 2500 2500 7500
Computer and fittings
10000 10000
Total payments
58000 80000 85600 223600
Net inflow/outflow
2000 2000 15800 15800
opening cash at bank
1000 3000 1000
Closing cash at bank
3000 1000 16800

PART B
During the monitoring cycle you are required to undertake 2 of the following
processes to inform management of the actual budget:
(you clearly need to select these relevant for the performance of your budget; for
example if your staffing and rostering performs within the budget and service
provisions are being met, then it would be unlikely that you would need to reduce
staff or cut rosters; if your budget is created on the best quotes received from
suppliers and the quality is perfect, then this aspect is likely not one that would be
changed)

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1. discussions with existing suppliers
2. evaluation of staffing and rostering requirements
3. evaluation of impact of potential roster changes
4. review of operating procedures
5. sourcing new suppliers

Attach details for each process you have undertaken clearly marked “TASK 2 –
process: __________”.

Details for each process selected must include the following details:

(For example, if you changed a roster, you need to provide the information why this
was done, what the changes will achieve in $ values for the budget, and attach the
old and revised roster to this project)
1. Nature of the problem
2. Reason for undertaking the selected process
3. What did you do? Who was involved? What was discussed? What was agreed
on? What was achieved in the process?
4. What was changed?
5. How were any changes implemented?
1. Discussions with existing suppliers.
Nature of the problem – demotivation of the employees within an organization.
Reasons: To basically the need for the employees to meet dynamic nature of the
issues that have been revolving within an organization.
Steps and business process: The people that were involved includes the chief
executive officer as well as the director who heavily contributed on the need for
safety and meeting the market specifications. The major issues that were
discussed includes; safety, meeting market demand as well as quality of the
products.
Change: Normal training is changed to in depth training through attending of
chemical summits as well workshops focusing on safety and quality.
Implementation of changes: Human resource team has changed their styles of
training and the company has been focusing on training more than just sales
which I believe would mitigate the challenges of safety as well as quality.
2. Evaluation of the requirements of rostering and staffing

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Nature of the problem: Exceeding of the food and labour costs budgeted amount
more than the actual amount.
Reasons: The reasons is associated with bringing down the expenditures levels
and the over expenses charges in order to improve the profitability of the hotel.
Steps and business process: The monthly budget variance are thoroughly
analysed with active involvement of the head of the finance department and the
supply chain department. Discussion on the business improvement areas was
held with achievement inclined to come up with effective business solutions.
Changing process: The hotel has effectively handled the unwanted resource and
the cost incurred for maintaining the levels of employees.
Implementation of the changes: Effective talks were held with the employees
and an assessment of the performance of the employees were carried on. This
procedure has helped the hotel to interpret the efficacy of the employees. To
maintain the unwanted resources, the hotel has resorted to keeping the focus on
the inventory levels.

PART C
Identify any reports, which you need to complete during the 3-month budget cycle.
Set the times these are due in the table below and complete these reports to the set
due dates.
Attach each report to this project on completion of the monitoring cycle.
Type of report Frequency Due Date(s) Completed by
Stock labels monthly end week 4 A sous chef with
Report an apprentice
(22/05/2022)
end week 8
(19/06/2022)
end week 12
(16/07/2022)
Stock audit monthly end week 4 A sous chef with an
reporty apprentice
(22/05/2022)
end week 8
(19/06/2022)
end week 12
(16/07/2022)
Staff cost reports monthly end week 4 General manager
and HR manager
(22/05/2022)

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end week 8
(19/06/2022)
end week 12
(16/07/2022)
Sales reports monthly end week 4 General manager
(22/05/2022)
end week 8
(19/06/2022)
end week 12
(16/07/2022)
Wastage reports monthly end week 4 A sous chef and
general manager
(22/07/2022)
end week 8
(19/08/2022)
end week 12
(16/09/2022)

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