Sheet
Student name: |
Student ID: |
Student email: |
Phone: |
Course name: Diploma of Hospitality Management |
Course code: SIT50416 |
Unit of competency code:SITXFIN004 |
Unit of competency Name:Prepare and monitor budgets |
Task Number: |
Trainer name: |
●I declare thatthe work contained in this Assessment Task is my own, except whereacknowledgement of sources is made. I keep copy of these assignment submitted for my record.
●I have read the BIT’s Plagiarism Policy and Procedures.
●I understand the consequences of engaging in plagiarism and collusion.
Please note: You are advised to keep a copy of all your work submitted to the institute.
For office use only:
Date received from student:
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Name and signature of Trainer/Assessor:
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✂--------------------------------------------------------------------------------------------------------Student Receipt (to be completed by BIT staff only)
Unit(s) of competency (code and name):SITXFIN004-Prepare and monitor budgets
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Student name:
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Student ID:
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Staff member signature:
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Date:
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ASSESSMENTSUMMARY /COVER SHEET
This form is to be completed by the assessor and used as afinal record of student competency.
All studentsubmissions including any associated checklists (outlined below) are to be attached to this cover sheet before placing on the students file.
Student results are not to be entered onto the StudentManagementDatabase unless all relevant paperwork is completed and attached to this form.
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Student Name:
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Student ID No:
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Final Completion Date:
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Unit Code:
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SITXFIN004
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Unit Title:
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Prepare and monitor budgets
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Please attach the following documentation to this form
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Date
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Result
S = Satisfactory
NS = Not Satisfactory
NA = Not Assessed
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Date
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Reassessment
S = Satisfactory
NS = Not Satisfactory
NA = Not Assessed
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Assessment1
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●Debtors control ledger attached
●Stock control ledger attached
●Creditors control ledger attached
●Budgeted cash flow statement attached
●Comments on cash flow attached
●Budgeted P&L Statement attached
●Report on expected performance attached
●Checklist attached
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S | NS | NA
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S | NS | NA
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Assessment2
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●Initial budget attached
●Written recommendations for new vehicle attached
●Updated budget attached
●Recommendation attached
●Checklist attached
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S | NS | NA
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S | NS | NA
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Assessment3
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●Budget variance report attached
●Predicted cash balance attached
●Actual cash balance attached
●Report outlining probably variance reasons attached
●Answer re: Quarterly vs Monthly budgets attached
●Cash Flow Budget (October) attached
●Checklist attached
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S | NS | NA
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S | NS | NA
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Assessment4
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●Written Assessment
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S | NS | NA
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S | NS | NA
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Final Assessment Result for this unit
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C / NYC
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Assessor Notes:(inclusive of reassessment, reasonable adjustment, further opportunities for gap training etc.):______________
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Student Declaration:I declare that I have been assessed in this unit, and I have been advised of my result. Ihave been advised of and amaware of my appeal rights.
Name:____________________________
Signature:____________________________
Date:____/_____/_____
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Assessor Declaration:I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I have provided appropriate feedbackincluding advising the student ontheir appeal rights.I further declare that this assessment has been checked and is free from plagiarism
Name:____________________________
Signature:____________________________
Date:____/_____/_____
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Administrative use only
Entered onto Student Management Database
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●________________
Date
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Initials
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TrainersAssessment Resource
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Unitdetails
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SITXFIN004Prepare and monitor budgets
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Assessment Type
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This is asummative assessment, which requires each student to have adequate practice prior toundertaking this assessment
This assessment must be undertaken in a real or simulated work environment
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Assessment Methods
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Case study / role-plays
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Assessment1
(Case Study - 2 budgets)
Assessment2
(Case Study / Role-play)
Assessment3
(Case Study / Role-play)
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Written Assessment / Project
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Assessment4
(Written Assessment / Project)
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Unit Summary |
This unit describes the performance outcomes, skills and knowledge required to analyse financial and other business information to prepare and monitor budgets. It requires the ability to draft and negotiate budgets, identify deviations, and manage the delivery of successful budgetary performance.The unit applies to all tourism, travel, hospitality and event sectors. The budget may be for an entire organisation, for a department or for a particular project or activity.It applies to senior personnel who operate independently or with limited guidance from others and who are responsible for making a range of financial management decisions.No occupational licensing, certification or specific legislative requirements apply to this unit at the time of publication. |
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Summative Assessment - Assessor Instructions
It is important thatinconducting assessment, the assessor undertakes the following:
Prior to conducting the assessment
•Read the assessment tasksas detailedthroughout this document•Contextualise the task (and checklist) to ensure it reflects the students working environment. (Be sure to check with the mapping document to ensure any contextualisation still covers the unit requirements)•Read the assessor instructions and checklist prior to commencing the assessment•Ensure theassessment environmentis suitable for the parameters of the task,to ensure the students will have an appropriate opportunity to demonstrates their skills•Make suitable modifications to theassessment environment (if required),to allow all tasks to be observed•Ensure the student is allocated the appropriate time and resources for the task•Advise the student prior to conducting the assessment of:owhat will occur throughout the assessment processowhen the assessment will occurothe level of competency expected(review the checklist or the criteria for the task to ensure the student understands the assessment process and the expectations)othe RTOreasonable adjustment process and offer adjustment for any students needing assistanceothe RTOre-assessment and appeals process•You should not tell the student how to undertake thetask, as it would lead the student and render the assessment process invalid. The student should have been taught "How" to perform each task during the training stage, and is expected to know this prior to commencing the assessment.
Conducting the assessment
•Establish and oversee the evidence gathering process to ensureitremains valid, reliable, fair and flexible•Advise the student when to commence the assessment•Observe the student undertake the tasks as outlined•Record your observations in the assessor checklist•Where a checklist point is not observed due to an inappropriate environment, or for a reason outside the students control, modify the scenario to allow the student an opportunity to perform the associated task•Where a checklist point is not appropriate, write "N/A" in the space provided•Incorporate allowable adjustments to the assessment procedure without compromising the integrity of the assessment. Be sure to makeappropriatenotations on the assessment checklist to explain any variances tothe assessment process (such as probing questions, alterations to assessment environment, etc) to ensure the assessment process is transparent (and the assessment remains Valid)•Gather supporting documentation where available and appropriate (as evidence)•Do not interfere with the assessment unless thestudent’sactions impose a risk to themselves or anyone else. In the event that the actions of the student impact on the safety of any person - you are to immediately cease the assessment and take actions to reduce the identified risk.•If a student performs an action incorrectly, mark it as such. Record what you see, not what you want to see.•Once the assessment is complete, advise the student that the assessment has ceased, and record your comments in thesections provided.
Makingand recordingthe decision
•The student needs to be deemedsatisfactory in all assessmentsto gain competency.•You are to providefeedback*to the studenton their performance and/or the outcome from their assessment (whether satisfactory or not yet satisfactory)•If a studenthas been assessed as "NotYetSatisfactory"on their performance in an assessment they should be offered information about the appeal process and/or a reassessment opportunity.•Re-assessments:oRe-assessments are to be undertaken on a different date. This is to allow an opportunity for the student to undergo further training as required, and to ensure the student is assessed on their ability to demonstrate their actual skills and knowledge - not just their ability to answer questions / perform actions based on immediate advice of the assessor.oWhen undertaking observation based re-assessments, students must perform the full task that relates to the observation. This means if a student undertakes an observation and is marked not satisfactory on one or more points within the observation, they must perform the task again in full.oIf a student has been marked as satisfactory on any full observation task, they are not required to be re-assessed on that task again.oWritten assessments (if applicable). Students are only required to be re-assessed on the questions relating to the topic they answered incorrectly in the initial assessment. For example, if the student answered Q1, 2, 3 correctly, but answered Q4+5 incorrectly; then they must be re-assessed on Q4+5 on a later date•Using the evidence gathered and the rules of evidence (validity, reliability, sufficiency, currency and authenticity) determine the final outcome for the student.If you are in doubt, gatherfurther evidence to help guide your decision.•Assess the students on what youobserveduring the assessment period, not ontheiractions before or after the assessment.•If you are marking the student NYC, ensure you outline why you have made this decision, and provide advice on how the student can improve their skills / knowledge prior toreassessment;or if the re-assessment opportunities have lapsed,provideadvice on appeals and or re-enrolment.•Record the assessment results onto the Assessment Summary/ Cover Sheet, ensuring each section is complete•Attach all evidence (projects / checklists / tests, etc) to this form.•Submit the completed Assessment Summary/ Cover sheet and associated evidence for processing as per your RTO procedures
Providing feedback
•Provide constructive feedback to the student on their performance during the assessment period. Do not make any comments on actions undertaken prior or after the assessment period.•Provide the student with:oTheir assessment resultoClear and constructive feedback based on the assessment decisionoThe reasons underpinning your assessment decisionoInformation on ways of overcoming any identified gaps in competency revealed by the assessment the opportunity to discuss the assessment process and outcome information on reassessment and the appeals processes.oAn opportunity for reassessment if appropriate or requested by the candidateoInformation on appeal process as applicable to your organisation
ASSESSMENT 1 – STUDENT INFORMATION
This information is to be handed to each student to outline the assessment requirements
The owner of Cupcake Heaven, Sarah Winter, needs some assistance in preparing her budget and budget reports. She has gone through her past records thoroughly and has prepared a summary of what has happened and what is expected to happen. However she is unsure how to determine cash receipts from debtors and cash payments from creditors. She has provided the following for your information
From balance sheet
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Actual
31 July 2017
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Predicted
31 August 2017
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$
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$
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Balance of stock control
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2600
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36400
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Balance of debtors control
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2400
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2800
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Balance of creditors control
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8600
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9600
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Balance of cash at bank
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3210
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?
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From the profit and loss statement
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Actual
31 July 2017
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Predicted
31 August 2017
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Cash sales
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6500
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6600
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Credit sales
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2750
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2800
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Cost of sales
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4500
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4600
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Stock loss
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800
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800
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Wages
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1600
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1600
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Office expenses
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200
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200
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Discount expense
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110
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120
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Discount revenue
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150
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160
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Bad debts
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100
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100
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a)Reconstruct the following general ledger accountsto help Sarah with the preparation of her budgeted cash flow statement. Debtors Control, Stock Control and Creditors Control. Don’t forget to allow for 10% GST on all sales and purchases.b)Using the above information, plus your reconstructions from parta, prepare a budgeted cash flow statement for Cupcake Heaven for the month ending 31 August 2017.c)Taking into consideration your budgeted cash flow statement from part b, comment on the likely future cash position of this businessd)Prepare a budgeted profitand loss for the month ending 31 August 2017.e)Write a brief report on the future performance expectations of Cupcake Heaven in related to the expected profit or loss
Assessment Summary - You are to submit the following
•3 x reconstructed general ledger accounts•Budgeted cash flow statement and report•Budgeted Profit & Loss statement•Overview report on future performance expectations
This project is due for submission on: _____________________________________________
ASSESSMENT 1 – ASSESSOR INSTRUCTIONS
This information is to be handed to each student to outline the assessment requirements
Each student has been given the following case study:
“The owner of Cupcake Heaven, Sarah Winter, needs some assistance in preparing her budget and budget reports. She has gone through her past records thoroughly and has prepared a summary of what has happened and what is expected to happen. However she is unsure how to determine cash receipts from debtors and cash payments from creditors. She has provided the following for your information
From balance sheet
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Actual
31 July 2017
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Predicted
31 August 2017
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$
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$
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Balance of stock control
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2600
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36400
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Balance of debtors control
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2400
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2800
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Balance of creditors control
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8600
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9600
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Balance of cash at bank
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3210
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?
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From the profit and loss statement
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Actual
31 July 2017
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Predicted
31 August 2017
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Cash sales
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6500
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6600
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Credit sales
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2750
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2800
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Cost of sales
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4500
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4600
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Stock loss
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800
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800
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Wages
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1600
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1600
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Office expenses
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200
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200
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Discount expense
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110
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120
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Discount revenue
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150
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160
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Bad debts
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100
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100
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a)Reconstruct the following general ledger accounts to help Sarah with the preparation of her budgeted cash flow statement. Debtors Control, Stock Control and Creditors Control. Don’t forget to allow for 10% GST on all salesand purchases.b)Using the above information, plus your reconstructions from part a, prepare a budgeted cash flow statement for Cupcake Heaven for the month ending 31 August 2017.c)Taking into consideration your budgeted cash flow statement from part b, comment on the likely future cash position of this businessd)Prepare a budgeted profit and loss for the month ending 31 August 2017.e)Write a brief report on the future performance expectations of Cupcake Heaven in related to the expected profit or loss
Assessment Summary - You are to submit the following
•3 x reconstructed general ledger accounts•Budgeted cash flow statement and report•Budgeted Profit & Loss statement•Overview report on future performance expectations”
Assessors Notes:
•This assessment is a casestudy that focuses on the students ability to gatheroappropriate information to prepare budgetsoPrepare budgeted cash flow statementsoPrepare budgeted profit and loss statementsoExplain each prepared to their clientoProvide comment on business performance in relation to expected profit and loss.•No student self-assessment checklist has been provided with this assessment, as the students instructions provide clear guidance on what is expected to be completed and submitted.•Sample answers are provided below. Please refer to these whist assessing each students submission
ASSESSMENT1
A.Reconstruction of ledger accounts for August 2017
Debtors Control Account
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Balance
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Discount expense
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Sales
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Bad debts
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GST
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Cash at bank
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Balance
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Stock Control Account
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Balance
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Cost of sales
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Creditors
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Stock loss
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Balance
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Balance
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Creditors Control Account
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Discount revenue
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Balance
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Cash at bank
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Stock Control
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Balance
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Balance
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Budgeted Cash Flow Statement for month ending 31 August 2017
Cash flow from operating activities
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Cash sales
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Collections from debtors
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GST collected
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Payments to creditors
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Wages
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Office Expenses
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GST paid
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Cash provided (used) by operating activities
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Net increase (decrease) by operating activities
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Cash held at beginning of month
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Cash held at end of month
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C.Thecompany’scash position is expected to decrease in a dramatic fashion during August. The big problem is the expected increase in stock, which is expected to lead to a big jump in payments to creditors. The cash coming into the business from sales and debtors is well short of that required to pay suppliers. The owner will need to make arrangements to cover the anticipated shortfall in cash. Additional capitalmay have to be injected or an overdraft may have to be arranged
D.BudgetedProfit and LossStatement for month ending 31 August 2017
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Revenue
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Cash sales
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Credit sales
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Less
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Cost of sales
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Gross Profit
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Less
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Stock loss
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Adjusted Gross Profit
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Plus
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Other revenue
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Discount revenue
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Less
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Expenses
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Wages
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Office expenses
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Discount expenses
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Bad debts
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Net profit
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E.Although the future cash position of the business does not look bright, the profit performance or the business for August appears satisfaction. The difference between the two reports is that the budgeted cash flows include all the cash expected to be paid to the creditors. This is expected because the business is buildingup its stock levels for future trading. However, only the cost of goods actually sold is reported in the budgeted profit and loss statement. Therefore, this budget reports a positive result for August, despite the short fall of cash predicted in the budgeted statement of cash flows
This assessmentis contextualised for the classroom
oSimulation is a form of evidence gathering that involves the candidate in completing or dealing with a task, activity or problem in an off-the-job situation that replicatesthe workplace context. Documented definitions state "Simulations vary from recreating realistic workplace situations such as in the use of flight simulators, through the creation of role plays based on workplace scenariosto the reconstruction of a business situation on a spreadsheet. In developing simulations, the emphasis is not so much on reproducing the external circumstance but on creating situations in which candidates are able to demonstrate:▪technical skills(demonstrated through developing budgets)▪underpinning knowledge(demonstrated through reconstructing ledger accounts)▪generic skills such as decision making and problem solving(demonstrated through reconstructing ledger accounts)▪workplace practices such as effective communication(demonstrated when explaining accounts)"
oIn conducting training and assessment in a simulated workplace environment, trainers and assessors must make sure that the simulated environment gives the learner the opportunity to meet the following critical criteria:▪Quality – The work is of the standard requiredfor entryinto the industry.▪Productivity – The work is performed within a timeframe appropriatefor entryto the industry.▪Safety – The work is performed in a manner that meets industry safety standards.
oEach assessment has taken the following aspects into consideration, to ensure any simulations provide for integrated assessment of competence. This includes:▪performing the task (task skills)▪managing a number of tasks (task management skills)▪dealing with workplace irregularities such as unexpected problems, breakdowns and changes in routine (contingency management skills)▪fulfilling the responsibilities and expectations of the job and workplace, including working with others (job/role environment skills)▪transferring competencies to new contexts.
oIf a simulated workplace is used, it must allow for distractions such as background noises, ringing telephones, interruptions, etc. As this is aHospitality based businessunit, a simulated environment may also include an office environment with office equipment and computers. Each student must dress appropriately and professionally in line with workplace standards.
oFor each assessment, you are not to interfere. In the event that the assessment is activities willimpact on the safety of a student or bystander, the assessment must be stopped immediately
ASSESSMENT 1 – ASSESSOR CHECKLIST
This checklist is to be used when assessing the students in the associated task. This checklist is to be completed for each student. Please refer to separate mapping document for specific details relating to alignment of this task to the unit requirements.
Please complete below
Student Name:
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Student ID No:
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Date:
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Did the student perform the following as per answers provided
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Satisfactory
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Part A- Accurately reconstruct the Debtors Control Ledger
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●Yes●No
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Part A- Accurately reconstruct the Stock Control Ledger
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●Yes●No
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Part A- Accurately reconstruct the Creditors Control Ledger
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●Yes●No
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Part A- Allow for GST
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●Yes●No
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Comment:
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Part B- Provide an accurate budgeted cash flow statement
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●Yes●No
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Part B- identify negative cash held at end of month
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●Yes●No
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Comment:
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PartC- Identify cash flow decrease in August
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●Yes●No
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PartC- Explain reason for cash flow decrease (increased stock and payments to creditors)
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●Yes●No
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PartC- Recommend arrangements to made for additional capital injection
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●Yes●No
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Comment:
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PartD- Prepare accurate budgeted profit and loss statement for August
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●Yes●No
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PartD- Identify Gross Profit
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●Yes●No
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PartD- Identify Adjusted Gross Profit
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●Yes●No
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PartD- Identify Net Profit
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●Yes●No
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Comment:
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PartE- Identify satisfactory profit performance for August
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●Yes●No
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PartE- Explain reason for difference in reports (creditor payments)
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●Yes●No
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Comment:
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Ensure all calculations are accurate
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●Yes●No
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Provide clear explanations (easy to understand)
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●Yes●No
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Submit report on time
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●Yes●No
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Comment:
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Result: Satisfactory | Not Satisfactory | Not Assessed
Student Declaration:I declare that I have been assessed in this unit, and I have been advised of my result. Ihave been advised of andam aware of my appeal rights.
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Name:________________________
Signature:________________________
Date:____/_____/_____
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Assessor:I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I have provided appropriate feedbackincluding the students appeal rights
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Name:________________________
Signature:________________________
Date:____/_____/_____
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ASSESSMENT2– STUDENT INFORMATION
This information is to be handed to each student to outline the assessment requirements
Allan Smythe is the owner of Cakes-2-U, a specialist cake service that makes and delivers to wedding and celebratory cakes to customers. At the end of December 2016 there is only $260 in the company bank account. His other problem is that he would like to purchase a new vehicle (costing $25,000) for the business, but he doesn’t know when he will have the $10,000 deposit required. One of Smythes friends has advised him that he should prepare a forecast of his future transactions, but he is unsure how to do so. He has asked for your assistance and has provided the following information in relation to his business. (Youdo not have to account for the GST in this question).
•The quarter of January to March is Cakes-2-U’s busiest quarter each year. In January 2016 he earned the following revenue: January $12,000, February $14,000, and March $15,000. After this the business slowed down a little. In the next quarter he earned the following revenue. April, $14,000, May $12,000 and June $10,000. Allan is confident that revenue will be higher in the early part of 2017. He has already signed contracts to complete the following jobs in January 2017.•Piketon’s$1,900•Fox’s$1,750•Tan’s$1,800•Singh’s$1,950•Strong’s$1,850•Ablert’s$1,950•O’Conner’s$1,900•For the months of February and March, Allanexpects toearnfees from about 10% higher than the previous year, but in the quarter April-June he doesn’t expect the same level of business. In fact, he has stated that he expects his revenue to be about 5% lower than in the same quarter last year•Allanpurchases all ingredients and materials for jobs as they are required. When he is quoting for a job, he calculates the cost of materials and multiplies this by 4 to calculate the total cost of the job. Allan argues that this allows for labour costs, vehicle expenses and a profit margin for himself. The cost of materials is therefore 25% of the revenue expected to be earned.•The business employs 2 assistants who are each paid on Fridays. One is employed full time and is usually paid $500per week. Theother is employed on a casual basis. During the busiest months (January to March) the casual is probably paid around $500 per week. In the period April-June his wages will drop back to $400 per week. •The company has one vehicle which delivers all orders. Petrol expenses for the vehicle are usually around #200 per month, but in the January-March quarter this will go up to about $240 per month. The vehicle is due for a service in February, and this will cost about $320•Insurance on the vehicle is due on2 March each year, and is expected to cost $640 this year. Registration of the vehicle is due on 11 June and should be about $540•Allan advertises his business in the local papers at a cost of $150 per month•New equipment will have to be purchased duringFebruary at a cost of $3,800. Allan has arranged for a credit arrangement to help with this purchase. The supplier has agreed to take a $1,000 deposit on delivery of the equipment, and then $400 payments will have to be paid each month until it is fullypaid off•Allan does his office work from home. He usually incurs office expenses for the business at around $100 per month•Loan repayments of $1500 are due on 15 February, 15 May, 15 August and 15 November•Allan usually redraws $500 each Friday for personal use
a)Prepare a cash budget for Cakes-2-U for the period January - June 2017. You budget should allow for the anticipated cash balance at the end of each monthb)Provide a written report that states when Allan will be able to afford the $10,000 depositfor the new vehicle. Support your answer with reasonsc)Arrange a time and present your budget to Allan (role-played by your assessor) and explain your proposed cash budget along with your recommendations. It is important that you have access to a soft-copy of your budget for this meeting
Note: When you present your budget and response, it is important that you are professional. This means you must ensure all documentation is presented professionally, and that you explain everything in detail. If Allan asks any questions, you are to answer them clearly and accurately
You are to present your work on:_____________________________________________
ASSESSMENT 2 – ASSESSOR INSTRUCTIONS
This information is to be handed to each student to outline the assessment requirements
Each student has been given the following case study:
“Allan Smythe is the owner of Cakes-2-U, a specialist cake service that makes and delivers to wedding and celebratory cakes to customers. At the end of December 2016 there is only $260 in the company bank account. His other problem is that he would like to purchase a new vehicle (costing $25,000) for the business, but he doesn’t know when he will have the $10,000 deposit required. One of Smythes friends has advised him that he shouldprepare a forecast of his future transactions, but he is unsure how to do so. He has asked for your assistance and has provided the following information in relation to his business. (You do not have to account for the GST in this question).
•The quarterof January to March is Cakes-2-U’s busiest quarter each year. In January 2016 he earned the following revenue: January $12,000, February $14,000, and March $15,000. After this the business slowed down a little. In the next quarter he earned the following revenue. April, $14,000, May $12,000 and June $10,000. Allan is confident that revenue will be higher in the early part of 2017. He has already signed contracts to complete the following jobs in January 2017.•Piketon’s$1,900•Fox’s$1,750•Tan’s$1,800•Singh’s$1,950•Strong’s$1,850•Ablert’s$1,950•O’Conner’s$1,900•For the months of February and March, Allan expects toearnfees from about 10% higher than the previous year, but in the quarter April-June he doesn’t expect the same level of business. In fact, he has stated that he expects his revenue to be about 5% lower than in the same quarter last year•Allan purchases all ingredients and materials for jobs as they are required. When he is quoting for a job, he calculates the cost of materialsand multiplies this by 4 to calculate the total cost of the job. Allan argues that this allows for labour costs, vehicle expenses and a profit margin for himself. The cost of materials is therefore 25% of the revenue expected to be earned.•The businessemploys 2 assistants who are each paid on Fridays. One is employed full time and is usually paid $50 per week. The other is employed on a casual basis. During the busiest months (January to March) the casual is probably paid around $500 per week. In the period April-June his wages will drop back to $400 per week. •The company has one vehicle which delivers all orders. Petrol expenses for the vehicle are usually around #200 per month, but in the January-March quarter this will go up to about $240 per month. The vehicle is due for a service in February, and this will cost about $320•Insurance on the vehicle is due on 2 March each year, and is expected to cost $640 this year. Registration of the vehicle is due on 11 June and should be about $540•Allan advertises his business in the local papers at a cost of $150 per month•New equipment will have to be purchased during February at a cost of $3,800. Allan has arranged for a credit arrangement to help with this purchase. The supplier has agreed to take a$1,000 deposit on delivery of the equipment, and then $400 payments will have to be paid each month until it is fully paid off•Allan does his office work from home. He usually incurs office expenses for the business at around $100 per month•Loan repayments of $1500 are due on 15 February, 15 May, 15 August and 15 November•Allan usually redraws $500 each Friday for personal use
a)Prepare a cash budget for Cakes-2-U for the period January - June 2017. You budget should allow for the anticipated cash balanceat the end of each monthb)Provide a written report that states when Allan will be able to afford the $10,000 deposit for the new vehicle. Support your answer with reasonsc)Arrange a time and presentyour budget to Allan (role-played by your assessor) and explain your proposed cash budget along with your recommendations. It is important that you have access to a soft-copy of your budget for this meeting
Note: When you present your budget and response, it is important that you are professional. This means you must ensure all documentation is presented professionally, and that you explain everything in detail. If Allan asks any questions, you are to answer them clearly and accurately”
Assessors Notes:
•This assessment is a case study that focuses on the students ability to:oGather appropriate information to prepare budgetsoPrepare a cash budgetsoExplain cash budget and answer customers questionsoConsider changes that may affect cash budgetoModify budget and make recommendations on viability of modifications•No student self-assessment checklist has been provided with this assessment, as the students instructions provide clear guidance on what is expected to be completed and submitted.•The student is required to present their work to you (the client) as part of this assessment. When role-playing the client you are to allow the student to explain their cash budget and recommendations themselves. If the student presents irregularities in their budget, you are to question them. (A sample completed cash budget is provided below)•Note: in 2017 there are 4 pay days in each month, with the exception of March and June , where there are 5 Fridays, and therefore 5 pay days:
•After the student has presented their budget, you are to explain the following:oYou have hadsecond thoughts about the expected downturn in business in the April-June period. You are considering a new advertising strategy that will cost him $100 more each month (for April - June) butareexpected to increase his revenue during these months by 8%.However this will increase the wages by $150 per week and, of course, the extra jobs will cause an increase in the amount of materials that would be used. oAsk the student to redraft the budget and take note of the changes in the estimated bank balances. Ask the student if you shouldgo ahead with this advertising planand the reasons for their answer.•The student will need to go and re-work the budget before responding to your question. You are to allow a short period of time for this to occur (up to1 hour), but realistically it should only take a student a maximum of 30 minutes to respond appropriately. •By asking your student to work this out immediately, it allows the student to demonstrate their ability to meet appropriate deadlines and also reduces the risk of the student copying their answer from others. This modification extension helps demonstrate authenticity, as the student will need to re-work their figures
•Sample answers are providedoverleaf. Please refer to these whist assessing eachstudents submission
ASSESSMENT2
A.Cash budget for 6 months ending 30 June 2017 |
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Jan
$
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Feb
$
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Mar
$
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Apr
$
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May
$
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Jun
$
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Estimated receipts
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Fees
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Total receipts
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Estimated payments
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Materials
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Wages
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Petrol
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Service of delivery vehicle
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Insurance of delivery vehicle
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Registration of delivery vehicle
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Advertising
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Purchase of equipment
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Office expenses
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Loan repayments
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Drawings
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Total payments
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Excess (deficit) for month
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Bank balance at start of month
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Bank balance at end of month
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B.The earliest he should buy the new vehicle is in April. This leaves him with a safetymargin of about $1,800. IfSmythehas doubts about this he should delay the purchaseuntil May. As the business expects to have a negative cash flow in June,Smythemaywell hold off on his decision so that the next quarterly budget can be prepared. The factthat the cash position is expected to drop back to around $10,000 by the end of Juneis a warning that the business may not be able to go ahead with the purchase of thenew vehicle. It should be kept in mind that, once the deposit of $10,000 has been paid,another $15,000 still has to be paid in the future. This would put the cash resources of thisbusiness under intense pressure.
D.Revised cash budget for 6 months ending 30 June 2017 |
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Jan
$
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Feb
$
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Mar
$
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Apr
$
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May
$
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Jun
$
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Estimated receipts
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Fees
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Total receipts
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Estimated payments
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Materials
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Wages
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Petrol
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Service of delivery vehicle
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Insurance of delivery vehicle
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Registration of delivery vehicle
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Advertising
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Purchase of equipment
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Office expenses
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Loan repayments
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Drawings
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Total payments
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Excess (deficit) for month
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Bank balance at start of month
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Bank balance at end of month
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D. Comment:At first glance the new advertising strategy appears to be worthwhile. The predicted cash balance for April increases from $11,855 to $11,953 (increase of $98). In May the change is from $12,255 to $12,337 (increase of $82). However, in June the change is a negative result. Rather than the expected balance of $10,740, the reviewed budget predicts a balance of $10,542, a reduction of $198. This negative change is the result of the increase in wages and the fact that in June there are 5 pay days. The increase of $150 per week leads to an expected increase in wages for June of $750 ($150 x 5). This paymenteliminates any gains made in the area of revenue and therefore the advertising plan should not be adopted. An alternative point of view is that the plan should be adopted because it generates an increase in the market share for the business. The new advertising is expected to generate new work, meaning that new opportunities will be created for ‘word of mouth’ advertising. As long as customer satisfaction is high, it may well be that the new plan is just what the business needs in the slower months of the year. This may well lead to a very busy period in the following months! It is valid to argue that for around $200 (the net change in the budget) the business may, in the long run, receive benefits outweighing this cost.
This assessmentis contextualisedfor the classroom
a.Simulation is a form of evidence gathering that involves the candidate in completing or dealing with a task, activity or problem in an off-the-job situation that replicates the workplace context. Documented definitions state "Simulationsvary from recreating realistic workplace situations such as in the use of flight simulators, through the creation of role plays based on workplace scenariosto the reconstruction of a business situation on a spreadsheet. In developing simulations, the emphasis is not so much on reproducing the external circumstance but on creating situations in which candidates are able to demonstrate:i.technical skills(demonstrated through developing budgets)ii.underpinning knowledge(demonstrated through reconstructing ledger accounts)iii.generic skills such as decision making and problem solving(demonstrated through reconstructing ledger accounts)iv.workplace practices such as effective communication(demonstrated when explaining accounts)"
b.In conducting training and assessment in a simulated workplace environment, trainers and assessors must make sure that the simulated environment gives the learner the opportunity to meet the following critical criteria:i.Quality – The work is of the standard requiredfor entryinto the industry.ii.Productivity – The work is performed within a timeframe appropriatefor entryto the industry.iii.Safety – The work is performed in a manner that meets industry safety standards.
c.Each assessment has taken the following aspects into consideration, toensure any simulations provide for integrated assessment of competence. This includes:i.performing the task (task skills)ii.managing a number of tasks (task management skills)iii.dealing with workplace irregularities such as unexpected problems, breakdowns andchanges in routine (contingency management skills)iv.fulfilling the responsibilities and expectations of the job and workplace, including working with others (job/role environment skills)v.transferring competencies to new contexts
d.If a simulated workplace isused, it must allow for distractions such as background noises, ringing telephones, interruptions, etc. As this is aHospitality based businessunit, a simulated environment may also include an office environment with office equipment and computers. Each student must dress appropriately and professionally in line with workplace standards.
e.For each assessment, you are not to interfere. In the event that the assessment is activities will impact on the safety of a student or bystander, the assessment must be stopped immediately
ASSESSMENT 2 – ASSESSOR CHECKLIST
This checklist is to be used when assessing the students in the associated task. This checklist is to be completed for each student. Please refer to separate mapping document for specific details relating to alignment of this task to the unit requirements.
Please complete below
Student Name:
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Student ID No:
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Date:
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Did the student perform the following as per answers provided
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Satisfactory
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Part A- Develop a cash budget for Jan-Jun 2015 that is
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•Accurate(refer sample answer provided) |
●Yes●No
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•Recognises that there are 5 paydays in March and June |
●Yes●No
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•Includes all estimated receipts and all estimated payments (refer sample answer provided) |
●Yes●No
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Comment:
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PartB- Provide a recommendation that
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•Identifies April as the appropriate month to purchase |
●Yes●No
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•Identifies the safety margin of about $1800 |
●Yes●No
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•Identifies the cash flow drop in June which may place strain on the business |
●Yes●No
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•Identifies thatafter the $10,000 is paid, another $15,000 must also be paid in the future, which will place immense pressure on the business |
●Yes●No
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Comment:
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PartC- Arrange a time to meet with the assessor and
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•Present budget professionally (easy to read,accurate, etc.) |
●Yes●No
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•Clearly explain the budget |
●Yes●No
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•Highlight the proposed excess or deficits per month |
●Yes●No
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•Highlight the bank balance at the end of each month |
●Yes●No
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•Demonstrate that they understood their figures (by knowing what they are talking about) |
●Yes●No
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•Listen to Allan’s opinion (as outlined in Assessor Instructions) |
●Yes●No
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•Advise Allan that they will need to revisit the figures before providing an answer (not guess or make an immediate answer without running and checking the figures) |
●Yes●No
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Comment:
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PartD- Review the budget:
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•Consider the new details provided by the client |
●Yes●No
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•Adjust the budget reflecting the changes |
●Yes●No
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•Provide an accurate reviewed budget |
●Yes●No
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•Identify thenegative result in June |
●Yes●No
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•Identify the cause for the loss (additional pay days, which eliminates any gains) |
●Yes●No
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•Make a recommendation that is supported by fact (refer to sample recommendation provided in Assessors Instructions - AnswersSection) |
●Yes●No
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•Initial budget attached |
●Yes●No
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•Written recommendations for new vehicle attached |
●Yes●No
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•Updated budget attached |
●Yes●No
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•Recommendation attached |
●Yes●No
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Comment:
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Result: Satisfactory | Not Satisfactory| Not Assessed
Student Declaration:I declare that I have been assessed in this unit, and I have been advised of my result. Ihave been advised of andam aware of my appeal rights.
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Name:________________________
Signature:________________________
Date:____/_____/_____
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Assessor:I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I have provided appropriate feedbackincluding the students appeal rights
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Name:________________________
Signature:________________________
Date:____/_____/_____
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SITXFIN004 assessmentSeptember 2018 Review date:December2018
TOID 21438 CRICOS code 02552G Page1of36 Authorised by M. Phillips
ASSESSMENT3– STUDENT INFORMATION
This information is to be handed to each student to outline the assessment requirements
PART1:The following comparison of budgeted cash flow and actual cash flows has been prepared for Donna’s Diner for the quarter ending 30 September 2017
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Budget
$
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Actual
$
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Receipts
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Cash fees
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24000
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32000
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Collections from debtors
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12000
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14500
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Loan from ABC Finance Company
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5000
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GST Collected
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2400
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3200
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Payments
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Wages
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6000
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6500
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Insurance
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800
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840
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Suppliers
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14000
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16400
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Postage and telephone
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400
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380
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Purchaseof new equipment
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5000
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4600
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Cleaning of shop
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1200
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1200
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Drawings
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4500
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3800
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GST Paid
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2140
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2342
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The business had $500 in the bank on 1 July 2017
A.Prepare a budgetvariance report for the quarter ended 30 September 2017 to reveal the significant differences between the budgeted and actual dataB.What was the predicted cash balance on 30 September?C.What was the actual cash balance on 30 September?D.State, and explain, the major causes of the difference between the budgeted and actual bank balanceE.Do you think that the quarterly period is appropriate for cash budgeting? Give reasons for your answer
You are to present your work on: _____________________________________________
PART2:Following from Part A, you are to arrange a time to talk with your assessor (who will role-play the manager for Donna’s Diner) and identify the possible cause for any unfavourable variances. You are to take into consideration the information you obtain, and then develop a projected cash flow budget for the next 1 month.
Prior to meeting with the supervisor it is important that you are prepared. This means you must know what you need to ask, as you will need this information to complete the next cash flow budget.
After meeting with your assessor, you are to developacash flow budget (for October 2017),and submit it along with a written report outlining the variations made and reasons.
This assessment is due on: ___________________________________________
ASSESSMENT3– ASSESSOR INSTRUCTIONS
This information is to be handed to each student to outline the assessment requirements
Each student has been given the following case study:
“Part1:The following comparison of budgeted cash flow and actual cash flows has been prepared for Donna’s Diner for the quarter ending 30 September 2017
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Budget
$
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Actual
$
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Receipts
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Cash fees
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24000
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32000
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Collections from debtors
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12000
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14500
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Loan from ABC Finance Company
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5000
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GST Collected
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2400
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3200
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Payments
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Wages
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6000
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6500
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Insurance
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800
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840
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Suppliers
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14000
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16400
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Postage and telephone
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400
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380
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Purchaseof new equipment
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5000
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4600
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Cleaning of shop
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1200
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1200
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Drawings
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4500
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3800
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GST Paid
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2140
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2342
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The business had $500 in the bank on 1 July 2017
A.Prepare a budget variance report for the quarter ended 30 September 2017 to reveal the significant differences between the budgeted and actual dataB.What was the predicted cash balance on 30 September?C.What was the actual cash balance on 30 September?D.State, and explain, the major causes of the difference between the budgeted and actual bank balanceE.Do you think that the quarterly period is appropriate for cash budgeting? Give reasons for your answer
PART2:Following from Part A, you are to arrange a time to talk with your assessor (who will role-play the manager for Donna’s Diner) and identify the possible cause for any unfavourable variances. You are to take into consideration the information you obtain, and then develop a projected cash flow budget for the next 1 month.
Prior to meeting with the supervisor it is important that you are prepared. This means you must know what you need to ask, as you will need this information to complete the next cash flow budget.
After meeting with your assessor, you are to develop the cash flow budget (for October 2017),and submit it along with a written report outlining the variations made and reasons.”
Assessors Notes:
•This assessment is a case study that focuses on the students ability to:oMonitor the effectiveness of budgetsoIdentify variances in budgetsoExplain variances in budgets clearly and accurately•No student self-assessment checklist has been provided with this assessment, as the students instructions provide clear guidance on what is expected to be completed and submitted.•Part1requires no interaction with the student, as all required information is included in the Student Information Form•Part2: The student is required to present their work to you (the client) as part of this assessment. When role-playing the client you are to allow the student to present their cash flow budget and answer any questions relating to unfavourable variances. If the student presents irregularities in their budget, you are to question them. It is importantthat you only answer questions asked by the student during this conversation and not lead them in any way.•Part2: Reasons forvariationsare as followsoCash Fees(expected to continue - Ongoing catering job of $1,300 only commenced in September) ($32000- $1300 = $30700 / 3 = $10233 + $1300 = $11533oLoanfrom ABC company- did not apply due to increased sales and debtor collectionsoWages- Overtime was payable due to a catering job that was picked up in September. This catering job is ongoing, and is worth $1,300 per month (which results in an increase of COGS of $340 and increase of wages of $500). Note the catering job only accounts for 1 month in budget variance quarteroSuppliers- additional ingredients required due to increase in sales(ongoing). Note the catering job only accounts for 1 month in budget variance quarteroInsurance- premium increase due to change in fire levyoDrawings- this is not ongoing and will revert to $1500 per monthoGST- direct result of increased sales•Sample answers areprovidedoverleaf. Please refer to these whist assessing each students submission
ASSESSMENT3
A.budgetvariance report for quarter ended 30 September 2010 |
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Budget
$
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Actual
$
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Variance
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$
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%
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F or U
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Receipts
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Cash fees
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Collections from debtors
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Loan from ABC Finance Company
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GST Collected
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Total Receipts
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Payments
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Wages
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Insurance
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Suppliers
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Postage and telephone
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Purchaseof new equipment
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Cleaning of shop
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Drawings
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GST Paid
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Total payments
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Excess of receipts over payments
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Bank balance as at 1 Jul 2017
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Bank balance as at 30 Sep 2017
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B.Predicted cash balance was $9,860C.Actual cash balance was $14,138D.Major reasons for difference:a.Receipts: Cashsales were $8,000 above budget. Collections from debtors were $2,500 higher than expected. These unexpected results probably made the loan of $5,000 unnecessary. (Note: although the loan is listed as an unfavourable variance, it would probably be viewed as a positive result!)b.Payments: Outflows to suppliers were $2,400 over budget. This may have been due to the higher levels of fees (more business leads to higher purchases of materials). Drawings were 16% below budget. The equipment was purchased at a much better price than was expected and helped the firm achieve the pleasing result.E.A monthly budget period is usually preferred to a quarterly budget. The problem with a quarterly period is that shortages may occur in some months before a recovery occurs within the quarter. A quarterly budget does not reveal the full month-by-month picture and may therefore not show that liquidity problems maybe forthcoming
Part B - Cash Flow Budget - October 2017
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Budget
$
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Receipts
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Cash fees
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Collections from debtors
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GST Collected
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Total Receipts
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Payments
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Wages
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Insurance
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Suppliers
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Postage and telephone
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Purchase of new equipment
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Cleaning of shop
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Drawings
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GST Paid
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Total Payments
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Excess of receipts over payments
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This assessmentis contextualised for the classroom
a.Simulation is a form of evidence gathering that involves the candidate in completing or dealing with a task, activity or problem in an off-the-job situation that replicates the workplace context. Documented definitions state "Simulations vary from recreating realistic workplace situations such as in the use of flight simulators, through the creation of role plays based on workplace scenariosto the reconstruction of a business situation on a spreadsheet. In developing simulations, the emphasis is not so much on reproducing the external circumstance but on creating situations in which candidates are able to demonstrate:i.technical skills(demonstrated through developing budgets)ii.underpinning knowledge(demonstrated through reconstructing ledger accounts)iii.generic skills such as decision making and problem solving(demonstrated through reconstructing ledger accounts)iv.workplace practices such as effective communication(demonstrated when explaining accounts)"
b.In conducting trainingand assessment in a simulated workplace environment, trainers and assessors must make sure that the simulated environment gives the learner the opportunity to meet the following critical criteria:i.Quality – The work is of the standard requiredfor entryinto the industry.ii.Productivity – The work is performed within a timeframe appropriatefor entryto the industry.iii.Safety – The work is performed in a manner that meets industry safety standards.
c.Each assessment has taken the following aspects into consideration, to ensure any simulations provide for integrated assessment of competence. This includes:i.performing the task (task skills)ii.managing a number of tasks (task management skills)iii.dealing with workplace irregularities such as unexpected problems, breakdowns and changes in routine (contingency management skills)iv.fulfilling the responsibilities and expectations of the job and workplace, including working with others (job/role environment skills)v.transferring competencies to new contexts
d. If a simulated workplace is used, it must allow for distractions such as background noises, ringing telephones, interruptions, etc. As this is aHospitality based businessunit, a simulated environment may also include an office environment with office equipment and computers. Each student must dress appropriately and professionally in line with workplace standards.
e.For each assessment, you are not to interfere. In the event that the assessment is activities will impact on the safety of a student or bystander, the assessment must be stopped immediately
ASSESSMENT3– ASSESSOR CHECKLIST
This checklist is to be used when assessing the students in the associated task. This checklist is to be completed for each student. Please refer to separate mapping document for specific details relating to alignment of this task to the unit requirements.
Please complete below
Student Name:
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Student ID No:
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Date:
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Did the student perform the following as per answers provided
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Satisfactory
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Part A- Develop a budget variance report that
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•Is accurate(refer sample answer provided) |
●Yes●No
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•Shows variance in $ format |
●Yes●No
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•Shows variance in % format |
●Yes●No
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•Indicate if each variance is Favourable (F) or Unfavourable (U) |
●Yes●No
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Comment: (assessor must complete)
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PartB -Identify predicted cash balance of $9,860
|
●Yes●No
|
Comment: (assessor must complete)
|
PartC -Calculate cash balance for $14,138
|
●Yes●No
|
Comment: (assessor must complete)
|
PartD -Identify reasons for variances including
|
•Cash sales $8000 above budget |
|
•Debtor collections $2,500 than expected |
|
•Above results probably made the loan unnecessary |
|
•Payments to suppliers $2,400 over budget - possibly due to higher sales resulting in higher cost of goods sold |
|
•Drawings 16% belowbudget |
|
•Equipment purchased at a better price than anticipated |
|
Comment: (assessor must complete)
|
PartE- Provide a recommendation that
|
•Recommend monthly budget over quarterly
|
●Yes●No
|
•Quarterly does not review full month by month figures |
●Yes●No
|
•Quarterly may not identify liquidity problems forthcoming |
●Yes●No
|
Comment: (assessor must complete)
|
PartF- Arrange a time to meet with the assessor and
|
•Present budget professionally (easy to read, accurate, etc.) |
●Yes●No
|
•Clearly explain the budget |
●Yes●No
|
•Highlight and explain the favourable variances |
●Yes●No
|
•Highlight and explain the unfavourable variances |
●Yes●No
|
•Demonstrate that they understood their figures (by knowing what they are talking about) |
●Yes●No
|
Comment: (assessor must complete)
|
Ask questions to determine
|
●Yes●No
|
•Reasons for each unfavourable variance |
●Yes●No
|
•Reasons for significant favourable variances |
●Yes●No
|
•If variances are ongoing or once-off |
●Yes●No
|
•Any significant changes |
●Yes●No
|
Comment: (assessor must complete)
|
Review information received and develop cash flow budget for October that:
|
●Yes●No
|
•Is based on the actual figures provided (3 monthly divided by 3) |
●Yes●No
|
•Takes into consideration increased receipts from ongoing monthly catering job |
●Yes●No
|
•Takes into consideration increased wages as a result of ongoing monthly catering job |
●Yes●No
|
•Takes into consideration increased COGS as a result of ongoing monthly catering job |
●Yes●No
|
•Removes requirement for Loan |
●Yes●No
|
•Keeps drawings at $1500 |
●Yes●No
|
Comment: (assessor must complete)
|
October Cash Flow Statement reflects sample cash flow statement provided
|
●Yes●No
|
•Budget variance report attached |
●Yes●No
|
•Predicted cash balance attached |
●Yes●No
|
•Actual cash balance attached |
●Yes●No
|
•Report outlining probably variance reasons attached |
●Yes●No
|
•Answer re: Quarterly vs Monthly budgets attached |
●Yes●No
|
•Cash Flow Budget (October) attached |
●Yes●No
|
Comment: (assessor must complete)
|
Result: Satisfactory | Not Satisfactory | Not Assessed
Student Declaration:I declare that I have been assessed in this unit, and I have been advised of my result. Ihave been advised of andam aware of my appealrights.
|
Name:________________________
Signature:________________________
Date:____/_____/_____
|
Assessor:I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I have provided appropriate feedbackincluding the students appeal rights
|
Name:________________________
Signature:________________________
Date:____/_____/_____
|
SITXFIN004 assessmentSeptember 2018 Review date:December2018
TOID 21438 CRICOS code 02552G Page1of36 Authorised by M. Phillips