Reference no: EM132731330

The London Docks Caféth Planning and actual budgets for the month ended September 30, 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?

b) Report showing London Docks Cafe's revenue and spending variance for September?

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

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.