Nelson College London

ASSIGNMENT BRIEF
Qualification

Unit number,
code and title
Assignment
Brief

Pearson BTEC Level 4/5 HND Hospitality

Management

Unit 2, Finance in the Hospitality Industry

Unit Details:
Lecturer:

Module Leader:
Margaret Amankwah

DANIEL K. TOM-JOE

Distribution date

Submission deadline

UnitCode:
W/C
26 September 2016

Finance in The 12
Hospitality
(Unit - 2)
DecemberIndustry
2016 23.59pm

Programme Name:

HND in Hospitality Management

Awarding body:

Pearson

Assignment title

FIHI: Finance in the Hospitality Industry

Unit Level
(QCF):
QCF-4/5
Introduction
of this
assignment brief
The aim of this assignment is to help learners acquire in depth knowledge, and develop practical
Academic
Sept- December
2016 costs and profits, and support the manager
understanding
of term:
the accounting techniques
used to control

in making effective short-term decisions. It will also allow the learner to understand how to investigate
control systems, and income generation methods. Furthermore, it covers the use of various financial
ratios in analysing and interpreting financial statements. Additionally, learners are expected to
understand the different methods of pricing and management information in the hospitality industry. In
studying this unit, learners will gain a fundamental understanding of financial system(s) and practice(s),

Assignment Brief

as well as, performance measurement, and analysis within the hospitality industry.
Distribution date:
Learner declaration

Submission deadline:

W/C 26 /09/2016
12/12/2016

I certify that the work submitted for this assignment is my own and research sources are fully
acknowledged.

Result and feedback date:

Student signature:

4 weeks from the deadline

Date:

1 Unit 2- Finance in The Hospitality Industry, Assignment Brief of HND in Hospitality

Management

Nelson College London

Task 1

Title: A case study to illustrate the sources of funding available for business and service
organisations in the hospitality industry.
Scenario:
AC1.1 :In the world of organisations, there is a good deal of diversity and sophistication in
financing, for instance, capital markets and share options are available for parties who have
interest in such facility.
Review Five (5) sources of funding available to large and Small Organisations and relate them
to business and service industries, stating advantages and disadvantages of the sources you
identified, and making recommendation(s) on the most useful option, in your view.

AC1.2 Evaluate the contribution made by a range of methods of generating income within a
given business and services operation by Discussing any three of the following
Sales Promotion,
Commission,
Sub-Letting,
Sponsorship,
Grants,
Tracking Mechanisms
M1

Identify and apply strategies to find appropriate solutions: Identifying the sources of
finance and their appropriate application and implications in your sturdy. Various sources of
finance explained in Task 1(AC1.1 and AC1.2); methods of generating income clarity in
discussion using tables and diagrams

Task 2
Task 2 - LO2 Understand business in terms of the elements of cost
AC2.1 Discuss elements of cost,
Material
Labour and
Expenses
Using examples, draw related graphs of Fixed , variable and Semi-vriable costs
2 Unit 2- Finance in The Hospitality Industry, Assignment Brief of HND in Hospitality
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Nelson College London

(b) Explain the following using an example
Gross Profit Percentages And
Selling Prices
For products and services.
AC2.2 Evaluate Three (3) methods of Controlling Stock And Three (3) methods of Controlling
Cash in a hospitality business and services environment.

Task 3 - LO3: Be able to evaluate business accounts

AC3.1. Explain the Source And Structure Of The Trial Balance (state the procedure using an
example of a Trial balance in your explanation. ).Your answer must follow the following structure
Definition
Purpose
Source and structure
Sample trial balance
Procedure
AC3.2. Evaluate business accounts, adjustments and notes, using the table and information below.
a). Explain Adjustments And Notes in relation to business accounts and their effect(s) on the
account entries, and
b) Draw a new trial balance using the information provided below:
Trial balance of ABC Trade as of 31st August 2015
Particulars
Opening Stock
Purchases
Salaries
Wages
Carriage Inwards
Trading Charges
Carriage Outwards
Rent received
Cash
Capital
Bank (Overdraft)
Commission
Creditors

L/F

Debit Amount
(in )

Credit Amount
(in )

86,000
1,136,000
153,000
18,000
26,900
64,000
52,500
178,300
62,500
344,700
37,980
42,780

3 Unit 2- Finance in The Hospitality Industry, Assignment Brief of HND in Hospitality

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Nelson College London

Sales
Debtors
Machinery

Total

268,000
1,548,700

256,000
4,80,000
2,377,680

2,377,680

Required Adjustments: using the following additional information:

1. A machine purchased on credit from M/s Ramsay Machine Tools for 200,000 is not yet
recorded in the books.
2. Wages to the extent of 43,000 are incorrectly recorded as Salaries.
The additional information presented after the trial balance contains information relating to
accounting transactions, which are to be identified from the wordings.
AC 3.3. Discuss the process and purpose of budgetary control, using the trial balance given in
AC3.2.
AC 3.4. Analyse variances from budgeted and actual figures, offering suggestions for appropriate
future management action. Use examples wherever you can.
Standard cost of a Product

Materials (5kgs @ 10 per kg)

50.00

Labour (4hrs @ 5 per hr)

20.00

Variable overhead (4 hrs @ 2 per hr)

8.00

Fixed overhead (4 hrs @ 6 per hr)

24.00

Total

102.00

Budgeted results

Actual results

Production

1,200 units

Production

1,000 units

Sales

1,000 units

Sales:

900 units

Selling price

150 per unit

Materials:

4,850 kgs,
46,075

Labour:

4,200 hrs,

4 Unit 2- Finance in The Hospitality Industry, Assignment Brief of HND in Hospitality

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Nelson College London

21,210
Variable overheads

9,450

Fixed o/hds

25,000

Selling price

140 per unit

Calculate and explain the following variances:

Variable cost variances
a) The Material total variance
b) The direct material price variance
c) The direct material usage variance
Task 4
Scenario - The local Chamber of Commerce has asked you to give a talk on the calculation of
ratios and the use of ratio analysis. You have decided to illustrate your explanation using figures
extracted from the annual accounts of two theme parks as stated below.
Statement of financial position
as at 31 December

Grimes theme park

2014

2015

Giants House theme

park
2014

2015

Revenue
Cost of sales
Gross profit
Operating Expenses + income Tax
expense (at 25%)

24,000

26,400

60,000

55,000

14,000

15,400

35,000

35,000

Net Profit (Profit after Tax)

10,000

11,000

25,000

20,000

Retained profits

10,000

10,200

200,00

200,00

Equity share capital & retained profits

Debentures
Total capital employed

110,000
30,000
140,000

Inventory(Stock)
Total current assets
Total Current liabilities
Trade payables (Creditor)
Dividend per share given

15,000
38,000
44,000
2,100
8p

110,200
30,000
140,200
14,000
37,000
35,000
2,016
10p

700,000
100,000
800,000
50,000
120,000
110,000
5,200
12p

700,000
100,000
800,000
48,000
125,000
105,000
5,120
10p

5 Unit 2- Finance in The Hospitality Industry, Assignment Brief of HND in Hospitality

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Nelson College London

AC 4.1. Calculate and analyse all ratios to offer a consistent interpretation of historical business
performance.
You are required to calculate Ratios for the two companies for 2014 and 2015 financial year
assessing financial performances in the following areas:
Profitability Ratios Sales Growth, Gross Profit Margin, Net Profit Margin, Efficiency Ratios
Stock turnover,
Liquidity Ratios Acid Test Ratio, Current Assets Ratio.
AC4.2. Recommend appropriate future management strategies for the two theme parks based on the
ratios calculated in AC4.1.

Task 5 [Case Study]

Be able to apply the concept of marginal costing
CASE STUDY
Stephen and Ali are two young friends who just graduated from a Hospitality Management
programme and set themselves up in the restaurant business. They supply buffet menu to party and
event functions within London and South East region.
The restaurant has a simple cost structure which is made up of a standard cost of 380 whenever an
order is taken and 15.50 covering the catering costs per guest at any of their function.
The friends have received an order to provide catering services for the up-coming end-of-semester
party. The restaurant normally charges 25.00 per guest for such events but may consider reducing
this amount if a higher turnout can be guaranteed.

AC5.1. Categorise costs as Fixed, Variable And Semi-Variable for the given scenario.
6 Unit 2- Finance in The Hospitality Industry, Assignment Brief of HND in Hospitality
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How many guests are needed for the restaurant to breakeven and what would be the value of the
revenue?
AC5.2. Calculate contribution per product/customer and explain the cost/profit/volume relationship
for the given scenario.
If 80 people are booked for the event, what would be the profit to be made and the Margin Of
Safety(MOS)?
A booking of 100 people could be guaranteed if the price per ticket is reduced to 22.00. What
would be the profit and the margin of safety at this level of activity?
AC5.3. Justify short-term management decisions based on profit/loss potentials and risk (breakeven) calculations for the given business and services operation
With reference to the profit and margin of safety, which level of activity would you recommend and
why?
M2

Select/design and apply appropriate methods/ techniques: using correct calculations to arrive
at correct answers and fairly good recommendations in the report in LO5.

Important: You are required to give acknowledgement of any secondary data by using appropriate
referencing system (Harvard Reference System). Any material which is taken from a secondary
source, i.e. book or website, must be rephrased in your own words and acknowledged accordingly.

Achievement of Pass, Merit and Distinction Grade

Achievement of a Pass grade:
A pass grade is achieved by meeting all the requirements defined in the assessment criteria(AC) for
pass for each unit.
Achievement of a merit grade
To achieve a merit grade you must achieve a pass grade and also your essay/assignment/coursework
demonstrates your abilities and skills in the following areas:
7 Unit 2- Finance in The Hospitality Industry, Assignment Brief of HND in Hospitality
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Nelson College London

M1

Identify and apply strategies to find appropriate solutions: Identifying the sources of
finance and their appropriate application and implications in your sturdy. Various sources of
finance explained in Task 1(AC1.1 and AC1.2); methods of generating income clarity in
discussion using tables and diagrams

M2

Select/design and apply appropriate methods/ techniques: using correct calculations to arrive
at correct answers and fairly good recommendations in the report in LO5.

M3

Present and communicate appropriate findings; satisfying the rules of formatting (line

spacing, font size, margins), introduction, referencing and plagiarism.

Grade Descriptors:

Indicative Characteristics

Merit
M1

effective judgements have been made

Identify and apply

complex problems with more than one variable have been

strategies to find
appropriate solutions

explored

M2

an effective approach to study and research has been applied

relevant theories and techniques have been applied

Select/design and apply

a range of methods and techniques have been applied

appropriate

a range of sources of information has been used

the selection of methods and techniques/sources has been

methods/techniques

justified

the design of methods/techniques has been justified

complex information/data has been synthesised and processed

M3

appropriate learning methods/techniques have been applied

the appropriate structure and approach has been used

Present and

coherent, logical development of principles/concepts for the

communicate appropriate
findings

intended audience

a range of methods of presentation have been used and

technical language has been accurately used

communication has taken place in familiar and unfamiliar

contexts

8 Unit 2- Finance in The Hospitality Industry, Assignment Brief of HND in Hospitality

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Nelson College London

The communication is appropriate for familiar and unfamiliar

audiences and appropriate media have been used.

Achievement of a distinction grade

To achieve a merit grade you must achieve merit grade and also your essay/assignment/coursework
demonstrates your abilities and skills in the following areas:
D1:

Use critical reflection to evaluate own work and justify valid conclusions and

introduction.
D2:

Take responsibility for managing and organising activities In Task 3 & Task4

D3:

Demonstrate convergent/lateral/ creative thinking-overall the assignment

Grade Descriptor:

Indicative Characteristics

Distinction

D1
Use critical reflection to

conclusions have been arrived at through synthesis of ideas

and have been justified

evaluate own work and

the validity of results has been evaluated using defined

justify valid conclusions

criteria

self-criticism of approach has taken place

realistic improvements have been proposed against defined

D2

characteristics for success.

autonomy/independence has been demonstrated

Take responsibility for

substantial activities, projects or investigations have been

managing and organising

activities

D3 Demonstrate

planned, managed and organised

activities have been managed

the unforeseen has been accommodated

the importance of interdependence has been recognised and

achieved.
ideas have been generated and decisions taken

9 Unit 2- Finance in The Hospitality Industry, Assignment Brief of HND in Hospitality

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convergent / lateral /

self-evaluation has taken place

creative thinking

convergent and lateral thinking have been applied

problems have been solved

innovation and creative thought have been applied

receptiveness to new ideas is evident

effective thinking has taken place in unfamiliar contexts.

Submission Instructions:

Reasonable consideration will be given in the case of failure to submit the assignments on
time due to any medical reasons. ( Provided the sufficient medical proof is made available at
the time of exemption)

Late submissions are not allowed and will be penalised.

There is no word limit for this assignment; however, we would expect to you complete the
assignment within approximately 3000 words excluding references.

Referencing should be provided in Harvard Style referencing.

The assignments should be completed in Font Type: Time New Roman/Arial with Size 12
and 1.5 spacing between lines.

Appendix A:

Plagiarism and Collusion

Any act of plagiarism and collusion will be seriously dealt with according to the regulations. In this
context the definition and scope of plagiarism are presented below:
Using the work of others without acknowledging source of information or inspiration, even if the
words are changed or sentences are put in different order, the result is still plagiarism, (Cortell,
2003).
Collusion describes as the submission of work produced in collaboration for an assignment based
on the assessment of individual work. When one person shares his/her work with others who submit
part or all of it as their own work.
10 Unit 2- Finance in The Hospitality Industry, Assignment Brief of HND in Hospitality
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Appendix B:

Harvard Referencing System

Any information that is not yours needs to be referenced, or else it runs the risk of being adjudged
as plagiarism. Copying from someones work can be unintentional if you are unaware of the rules of
acknowledging and referencing direct quotations.
The Harvard systems of citation require you to acknowledge certain information which is mainly
the surname and year of publication within the text. For example:
According to Bell (1999), as you write up your research you will use a citation to indicate in
your text the source of piece of information, ......
The authors and publication information cited within the main body of your work must be listed in
the reference list. For example:
Bell, J. (1999) Doing your research Project. (3rd Ed) Buckingham: Open University Press.
Detailed guidance on the Harvard Referencing System (HRS) is available on the Virtual Tutor (VT).

Learning outcomes and assessment criteria from Unit Specification

Learning outcomes.

Assessment criteria for pass.

On successful completion of

The learner can:

this unit a learner will:

LO1:

AC1.1 review sources of funding available to business and

Understand sources of

services industries.

funding and income

AC1.2. evaluate the contribution made by a range of

generation for business and

methods.

services industries

of generating income within a given business and

LO2:

services operation.
2.1. discuss elements of cost, gross profit percentages and

11 Unit 2- Finance in The Hospitality Industry, Assignment Brief of HND in Hospitality

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Nelson College London

Understand business in

selling prices for products and services.

terms of the elements of

2.2. evaluate methods of controlling stock and cash in a

cost
LO3:

business and services environment.

3.1. assess the source and structure of the trial balance.

Be able to evaluate business

3.2. evaluate business accounts, adjustments and notes.

accounts

3.3. discuss the process and purpose of budgetary control.

3.4. analyse variances from budgeted and actual figures,
offering suggestions for appropriate future management

LO4:

action.
4.1. calculate and analyse all ratios to offer a consistent

Be able to analyse business

interpretation of historical business performance.

performance by the

4.2. recommend appropriate future management strategies

application of ratios
LO5:

for a given business and services operation.

5.1. categorise costs as fixed, variable and semi-variable for

Be able to apply the concept

a given scenario.

of marginal costing

5.2. calculate contribution per product/customer and explain

the cost/profit/volume relationship for a given scenario.
5.3. justify short-term management decisions based on
profit/loss potentials and risk (break-even) calculations
for a given business and services operation.

12 Unit 2- Finance in The Hospitality Industry, Assignment Brief of HND in Hospitality

Management