Social Studies, 16.12.2020 16:10 kailahgranger

London Docks Café is a company that prepares meals for tourists and citizens in its kitchen located next to the local airport. The company’s planning and actual budgets for September appears below: The London Docks Café

Planning and actual budgets for the month ended September 30th, 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)10 500 10 000

Utilities (£2 500 + £0.05q) 3 500 3 400

Facility rent 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? (15 marks)

b)Prepare a report showing London Docks Cafe’s revenue and spending variance for September? (20 marks)

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 (25 marks)

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. (30 marks)

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