Unit 2 P5 P7 M1 Essay

1488 WordsMay 18, 20156 Pages
5pm a-i Case Study – Sodor café Budgets a) A budget is an estimate of the income and expenditure of a business or a part of a business over a time period. A budgetary control enables mangers to implement budgets, it allows a business to make comparisons of the businesses actual performance and to revise budgets to help achieve objectives. The manager at Drayton Manors Sodor café would use a budget to exercise financial control as it would allow them to do the following: * Help monitor and control operations. * Promote forward thinking * Provide a framework for delegation * Help coordinate different departments achieve objectives together * Keeps you focussed on your goals- you can clearly see the expenditures the items which are unnecessary and don’t help you achieve your financial goals. If a business has limited resources, budgeting makes it easier to budget. b) Cost and revenues table 2013 (Figure 2) Annual sales/output of lunch packs | Total variable cost (at £2.00 each) | Annual Fixed cost | Total costs | Total Revenue (selling price of £3.50) | 0 | 0 | £40,020 | £40,020 | 0 | 16,000 | £32,000 | £40,020 | £72,020 | £56,000 | 32,000 | £64,000 | £40,020 | £104,020 | £112,000 | 48,000 | £96,000 | £40,020 | £136,020 | £168,000 | 64,000 | £128,000 | £40,020 | £168,020 | £224,000 | 80,000 | £160,000 | £40,020 | £200,020 | £280,000 | c)Budgeted Costs Table 2014 (Figure 3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Total | Salaries | £1,085.00 | £1,085.00 | £1,085.00 | £1,085.00 | £1,085.00 | £1,085.00 | £1,085.00 | £1,085.00 | £1,085.00 | £1,085.00 | £1,085.00 | £1,085.00 | £13,020.00 | Bank loan | £400.00 | £400.00 | £400.00 | £400.00 | £400.00 | £400.00 | £400.00 | £400.00 | £400.00 |

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