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Deliverable 2 - Managing Budget Variances/ MEMO

11/10/2020 Client: anasa Deadline: 24 Hours

 


Competency


Analyze operational budget drivers and variances.


Scenario


You are a sales manager responsible for the midwestern U.S. division of a grab and go style, limited-item restaurant chain that specializes in breakfast items, such as donuts and other bakery items, egg-based sandwiches, coffee, etc. Through the first three months of the fiscal year, the net sales revenue for the midwestern U.S. division has been 5% below budget combined across all items. Your supervisor, the head of sales for the entire U.S., has requested that you investigate the situation and make recommendations to prevent further revenue declines and increase sales revenue enough in the upcoming months to get back to the budgeted amount for the total year.


The business analyst supporting your sales team has prepared a set of budgets for review Click for more options


. The data includes the original master budget for the year and the sales figures for the completed quarter with variance amounts. The analyst has also provided the sales plan with mix information (i.e. price and quantity sales budgets along with variances for the quarter). The file also includes promotional metrics showing historical sales volume increases resulting from advertising and loyalty rewards.


Instructions


Write a memo summarizing your analysis of the variances to budget.



  • Describe at least two issues identified in your analysis;

  • Discuss at least two recommendations to prevent further declines in sales revenue and recover the unfavorable revenue variance from the first quarter;

  • Include a justification for your recommendations versus other possible options and describe the potential risks; and

  • Include supporting detail such as tables, calculations, or a revised forecast copied from Excel as appendices with the memo.



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