Assignment Details:-
- Category: Coursework
- Subject: Finance
- Module Title: HR7003 Finance Assignment
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Assignment Task
Coffee Shack is a privately owned company that runs an established chain of cafes in fifty-nine locations around the UK. Most are located on high streets and in shopping centres, but there are also units located in airports and large railway stations. The company sells a wide variety of speciality coffees, cakes, sandwiches, and other beverages. It markets itself as a sustainable business with high standards of business ethics.
The Coffee Shack is a company that serves commuters and regular customers located next to the busiest station and shopping malls. The company’s planning and actual budgets for January shown below:
Coffee Shack
Budget and actual data for the month ended January 31st, 2023.
Sale price: coffee @£2.50, Cakes @£2.00, sandwich @£3.00, beverages @£1.50 and meal deal @£4.50
Required:
(a) i) Prepare a report showing Coffee Shack revenue and spending variance for January 2023?
ii) Outline the objectives of budgeting and explain how Coffee Shack benefits from engaging in robust budgetary processes?
(b) Management Accountant of Coffee Shack has been analysing income statement on the store locations and drawn management attention of underperforming. The statement has shown details for the period ending31 December 20×2 is as follows:
Calculate and comment:
- Calculate the total contribution and discuss importance of break-even sale.
- Profitability ratios
- 30% of sales contain meal deals and representative cost associated to material is 45%. Evaluate viability of proposal when increase in sale for meal deals by 20% and Direct Material by 15% with other Selling & distributing overheads of £4000 will generate profits for upcoming period.
- Explain results and show benefits of Cost volume profit analysis
(c) Business expansion has always been a key focus of Coffee Shack management. The operations team has identified 8 new potential sites. Company has been considering proposals from different equipment suppliers. To make those sites operational, this requires significant investment. Two proposals have taken management interest. These are two proposals under consideration:
