Assessment 2 Outcome covered 2 Assessment instructions Using the Mar-Co case study, you will need to show that you can, use budget information covering two accounting periods for one part of the organisation. You will need to conduct an analysis based on actual performance of the organisation in relation to sales performance, prepare a notional budget and present your findings. Mar-Co European Discount Food Retailer Mar-Co stores are treated as individual profit centres and store managers are responsible for operating budgets and the overall profit and loss of their own store. Area managers closely monitor performance data and regularly analyse store performance on a weekly/monthly basis. Store Managers are expected to control each budget area and be able to account for their store performance. Store managers are required to monitor actual performance, compare it against the budget and identify variances both favourable and adverse. Calculating variances and then deciding on whether corrective actions are required is an essential component in ensuring that store performance is in line with expectations. This assessment task is focused on one important budget area in retail operations: Waste and Shrinkage. As previously noted, areas of internal risk to an organisation are preventable using well tried processes. This assessment requires you to analyse data from two quarterly performance reports and make comment on your findings as noted in the assessment instructions; You should review each quarter individually. 9 1 Review Quarter 1 Budget V Actual performance. Note the Budget for Quarter 1 is based on 13 weeks trading with a forecast turnover of 1,250,000 and actual turnover of 950,000. (a) Review the variances between budget and actual performance and select two variances where the budget has been exceeded. Give potential reasons for the overspend. (b) Describe potential reasons for the store not achieving its forecast turnover target. Item Actual +/-% Quarter 1 Budget % to Turnover 1,250,000 Turnover 950,000 76% Food waste fresh 2,500 0.2% 3,500 126% Food waste (other) 1,250 0.1% 1,250 124% Dry goods 1,250 0.1% 1,250 94% Damaged products 1,250 0.1% 1,250 82% Theft 625 0.05% 625 66% Till shortages 615 0.05% 615 100% Total 8,750 0.6% 8,490 103%