Finance Problem
The 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) 20000 18000
Revenues (£5.00q) £100000 £90000
Expenses:
Raw material (£2.50q) 50000 45000
Wages and salaries (£5 500+£0.25q) 10500 10000
Utilities (£2 500 + £0.05q) 3500 3400
Facility rent 5000 5500
Insurance 2800 3200
Fuel 2500 2800
Net Operating Income £25700 £20100
Required:
1. Outline the objectives of budgeting and explain how London Docks Café benefits from engaging in robust budgetary processes?
2. Prepare a report showing London Docks Cafe's revenue and spending variance for September?
3. Based on the variances report you prepared in (1) above, which area/s of activity should be of concern to the management of London Docks Café? Explain.
4. 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.
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.