Planning and actual budgets for the month ended December 31st, 2020 PLANNING ACTUAL Budgeted meals quantity (q) 20 000 18 000 Revenues (£5.00q) £100 000 £90 000 Expenses: Raw material (£2.50q) 50 000 45 000 Wages and salaries (£5 500+£0.25q) Utilities (£2 500 + £0.05q) Facility rent 10 500 10 000 3 500 3 400 5 000 5 500 Insurance 2 800 3 200 Fuel 2 500 2 800 Net Operating Income £25 700 £20 100 Required: a) Outline the objectives of budgeting and explain how London Docks Café benefits from engaging in robust budgetary processes? b) Prepare a report showing London Docks Cafe's revenue and spending variance for December? c) Based on the variances report you prepared in (b) above, which area/s of activity should be of concern to the management of London Docks Café? Explain d) Explain the terms profitability and sustainability. Assess and advise the London Docks Café on the measures they should adopt to ensure the attainment of both mandates.

Planning and actual budgets for the month ended December 31st, 2020 PLANNING ACTUAL Budgeted meals quantity (q) 20 000 18 000 Revenues (£5.00q) £100 000 £90 000 Expenses: Raw material (£2.50q) 50 000 45 000 Wages and salaries (£5 500+£0.25q) Utilities (£2 500 + £0.05q) Facility rent 10 500 10 000 3 500 3 400 5 000 5 500 Insurance 2 800 3 200 Fuel 2 500 2 800 Net Operating Income £25 700 £20 100 Required: a) Outline the objectives of budgeting and explain how London Docks Café benefits from engaging in robust budgetary processes? b) Prepare a report showing London Docks Cafe's revenue and spending variance for December? c) Based on the variances report you prepared in (b) above, which area/s of activity should be of concern to the management of London Docks Café? Explain d) Explain the terms profitability and sustainability. Assess and advise the London Docks Café on the measures they should adopt to ensure the attainment of both mandates.

Quickbooks Online Accounting

3rd Edition

ISBN:9780357391693

Author:Owen

Publisher:Owen

Chapter8: Budgets And Bank Reconciliations

Section: Chapter Questions

Problem 3.3C

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