HOSPITALITY INDUSTRY

Hospitality industry

INTRODUCTION1

TASK 2: CASE STUDY M&S1

1. Elements of Cost, Gross Profit Percentages and Selling Prices1

2. Methods of Controlling Stock and Cash3

TASK 3: YURI - CUTLERY MANUFACTURER5

1. Process and Purpose of Budgetary Control5

2. Variance Analysis of Yuri's budget6

TASK 4: R RIGGS - FINANCIAL STATEMENTS ANALYSIS8

1. Adjustments to the profit and loss accounts and balance sheet of R. Riggs8

2. Ratio for R. Riggs10

TASK 5: COSTING METHOD11

a) Write brief notes on your understanding of fixed, variable and semi-variable costs11

b) For each Proposal Calculate12

c) State with reasons which proposal you think should be adopted16

CONCLUSION16

REFERENCES17

Finance in the Hospitality Industry

Introduction

The Current Market Environment and Competition demand for strong and effective performance system in order to meet different goals of the company. On the other hand, when company formulate an effective performance system, they need to sustain this system as well i.e. monitory it effectiveness. In this paper, the focus would be on Case Study in which main theme would be monitoring and controlling performance of a company - Marks & Spencer. In this case study the discussion will be on elements of cost, gross profit percentages and selling prices for products and services and evaluating methods of controlling stock and cash in a business and services environment.

Task 2: Case Study M&S

1. Elements of Cost, Gross Profit Percentages and Selling Prices

Elements of Cost

Cost has been divided into Material Cost, Labour Cost and Expenses.

Material Cost: This refers to the product cost that includes Direct Material as well as Indirect Material. This should be noted that cost of material does not include indirect costs. With respect to case study, Material cost for M&S would be Fabric, leather as a direct martial and indirect would be thread used in manufacturing a product (Chakraborty, 2012, p. 16).

Labour Cost: The input of human employed for converting materials in to finished goods or doing other jobs for business has been termed as labour. With respect to case study, direct Labour cost would be payment to salaries and wages to paid to unskilled and skilled workers either for mechanical, manual work for machine operation. Indirect labour would be security guards standing outside the stores and factory (Banerjee, 2012, p. 222).

Expenses: Costs that are not part of material as well as labour, but involved in manufacturing a product or rendering services has been termed as Expenses. These expenses can also be direct or indirect. With respect to case study, hiring charges for special machinery, royalty, drawing, licences, carriage inward etc and indirect labour cost are machinery repair, insurance expenses, ATM charges, Interest expenses, fuel expenses, transportation outside factory etc.

Elements of Gross Profit Percentages

The elements of Gross Profit Percentages with respect to Case study are sales (selling clothing items) that are the total revenues generated by M&S, Gross Profit which is obtain by subtracting cost of sales from revenues.

Elements of Selling Prices

The elements of selling prices are cost per unit which is obtained by total variable cost and fixed cost. This should be noted that selling price is the final price charged for a ...