Simpsons Pty Ltd is a small take away restaurant located in Sydney CBD. The restaurant is owned by Mr & Mrs John Spice. The restaurant started its activities in January current year.
In December current year the following information was collected:
SALES AND COGS ACTIVITIES FOR CURRENT YEAR
The restaurant sold 54,600 take away meals, and the price per meal was $10.50. The food cost per meal sold was $4.60. Also 20,000 units of soft drinks were sold during the year. Soft drinks are sold for $2.50 and the cost price was $0.80.
BUDGET FORECASTING FOR NEXT YEAR
The owners estimated that for the next year the price per take away meal could be increased to $13.00. They have also predicted that sales (in units) would be increased by 10% in next year. The owners have entered into a monthly Contract
with the soft drinks supplier. According to the Contract the restaurant must purchase a minimum of 2,000 units of soft drinks per month and the cost price will be reduced to $0.50 per unit. The restaurant owners decided to reduce the selling price of soft drinks to $1.50 in order to increase sales (in units) by 50% and are expecting to meet the required selling demand.
The owners have anticipated the following expenses for next year:
ANTICIPATED YEARLY EXPENSES FOR NEXT YEAR
|Cost of Goods Sold (food + beverage)||$291,276|
[Hint: You may firstly calculate the daily sales, and then apply the number of days to work out the monthly figures. When working out or forecasting the accounts for cost of goods sold and expenses, you may consider to use the daily method or percentage of sales method.]
Task 1 has 4 activities which require you to prepare Microsoft Excel spreadsheets based on given scenarios to monitor and review the budgets
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*IMPORTANT NOTE: SPREADSHEETS MUST BE PREPARED USING
Based on the above Sales and COGS activities for current year;
Prepare a spreadsheet with annual Sales for food and drinks and COGS for meals and drinks; in addition include columns for the monthly average and quarterly average.
Using the prepared template from Question 1; continue with the following:
Based on the Budget forecasting for next year, as mentioned in the scenario:
Prepare a 2nd spreadsheet similar to Question 1 for the annual Profit and Loss Budget; also include end columns for average monthly and average quarterly totals.
Based on the following assumptions prepare a 3rd spreadsheet with the actual trading activities for the 1st quarter next year.
ASSUME THAT DURING THE 1ST QUARTER OF NEXT YEAR:
• Food revenue was 20% higher than the budget forecasted
• Food Cost was 30% higher than the budget forecasted
• Beverage sales was 15,000 units
• Utilities Expense was $3,000
• Wages expense $20,000
• Rent expense was $6,500
You are required to monitor the trading activities for Simpsons Pty Ltd for the first quarter of next year and identify and record in an additional column all dollar ($) variances from the forecasted budget.
In order to control costs prepare a 4th spreadsheet; identifying and recording the necessary adjustments to be made to the budget for the 2nd, 3rd and 4th quarters of next year.
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