Your Task:

The The MazReb Highland Hotel Group is a company that's based in the western frontier of Highland City, a tourism hotspot in the Republic of Karombe. The company's planning and actual budgets for December appears below:

The MazReb Highland Hotel Group

Planning and actual budgets for the month ended December 31st, 2021

                                                                        PLANNING ('000)    ACTUAL ('000)

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 possible drawbacks of budgeting and suggest practical ways through which The MazReb Highland Hotel Group could go about minimising these?

b) Prepare a report showing The MazReb Highland Hotel Group's revenue and spending variance for December. Based on this report, which area/s of activity should be of concern to the management of the hotel and WHY?

c) Explain the term "Sustainability". Assess and advise The MazReb Highland Hotel Group on the measures they can/should adopt to ensure sustainability in their operations

d) The Executive Management of The MazReb Highland Hotel Group have decided to build a new hotel in the eastern frontier of Highland City. Recommend a viable investment appraisal technique they could employ in evaluating their options in this respect (based on their circumstances).

The word count for this assignment is 1,500 words and will not include the title page, executive summary, contents page or bibliography.

Learning Outcome 1: Demonstrate an understanding of different markets and sources of finance; and the role of budgeting in an organisation.
Learning Outcome 2: Be able to assess budgets based financial data to support organisational objectives (CMI Los 2).
Learning Outcome 3: Analyse the information contained in a company's annual report; and appraise finance and investment decision.
Skills for life and work (general skills)
Learning Outcome 4: Demonstrate an understanding of the context within which accounting operates, and the various local and international standards that need to be complied with.

Learning Outcome 5: Effectively apply budgets and investment appraisal techniques.

Attachment:- Finance Assessment.rar