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SIT50116 Travel And Tourism Management

tag 1 Download 7 Pages / 1,738 Words tag 28-06-2021
  • Course Code: SIT50116
  • University: Academies Australasia
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  • Country: Australia

Question:

ACA Travel Agency is a small size travel agency, that has a been in business since 2009. It currently employs 2 travel consultant staff and one manager based in the CBD. The main destination of the clientele that visit the agency is South East Asia. This is because your reputation of quality service, good competitive pricing and skilled and knowledgeable agents. Customers are from many nationalities and some of the South East Asian tours that you offer have been very profitable over recent times due to the increase in the commission rate from the suppliers.

A detailed review of the ACA Travel Agency Business plan prior to commencement is recommended. Sections of the business plan can be used throughout this assessment and you may refer to its details for your task completion.

The owners have recently created a position for a contracted financial officer and you have been selected to review the ACA Travel Agency Business Plan, and using the background knowledge and information you will research and apply to the tasks below.The external accountant provided these updated records of Income & expenditure.

You are looking at the below Quarterly Business income statement for the quarter ending 31st March 201X. You have been assigned the task to calculate the Budgeted Income Statement for quarter ending 31st March 201X.)             

A1. The following information is given below: You are to calculate and complete all the shaded areas:

For quarter ending 31st March 201X 

 

Budget

Actual

International Packages

$ 865,000

$ 668,000

Domestic Packages

$ 729,000

$ 705,000

International Air

$ 456,000

$ 468,000

Domestic Air

$ 458,000

$ 395,000

International Packages

$ 495,000

$ 358,000

Domestic Packages

$ 365,000

$ 345,000

Salaries and Wages

$ 265,000

$ 248,000

Electricity

$ 5000

$ 5000

Advertising & Promotion

$ 301,000

$ 245,000

Salaries and Wages

$ 200,000

$ 220,000

Electricity

$ 5,000

$ 6,000

Advertising & Promotion

$ 100,000

$ 120,000

Salaries and Wages

$ 325,000

$ 130,000

Electricity

$ 10,000

$ 12,500

Advertising & Promotion

$ 85,000

$ 100,000

Salaries and Wages

$ 185,000

$190,000

Electricity

$ 1,800

$ 1,950

Advertising & Promotion

$ 55,000

$ 65,000

A2.  Using the BUDGETED INCOME STATEMENT ACA TRAVEL AGENCY (above) for quarter ending 31st March 201X, discuss in 150-200 words the overall outcome of the budget when compared to the actual: Is it Favourable/Unfavourable

A3. Investigate the BUDGETED INCOME STATEMENT ACA TRAVEL AGENCY for quarter ending 31st March 201X.

Discuss in 150-200 words at least two (2) actions that might be taken by you, as a manager, to correct adverse deviations (unfavourable) in the following situations: 

  • an excess of departmental salaries over budget;
  • a lower actual income volume compared with budget

A4. Based on the above information and your justifications, forecast/budget for the next quarter ending 30 June 201X. You are to forecast and complete all the shaded areas

Several internal and external factors need to be analysed when completing the forecast for ACA Travel:

  • Seasonal travel to South East Asia
  • Travel Advisory/terrorism Alerts available through www.safetraveller.gov.au
  • Market demand change due to online competition
  • Direct bookings with airlines and hotels
  • Packages available through consolidator website

A Travel Agency, has a been in business since 2009 in Sydney CBD. It has not upgraded its Computers, software and printers since opening in 2009.

The owner is thinking of buying new Apple computers and a new professional multifunction printer in three months’ time (December, 201X) at a cost of $65,000. The old computers and printer equipment will be sold for scrap at that time for $3,000.

Record provided by the Accountant show that the opening bank balance of $50,000 at the beginning of October. Other details include

  • The owner estimates $70,000 sales/commission for each month. Half these sales are received in cash and half are received in the next month as they are credit sales from the corporate accounts at the travel agency has payment arrangements with. Octobers credit sales from September, amount to $35,000.
  • Purchases amount to 25% of sales (excluding scrap) and are paid for in cash.
  • Full time labour/staff direct costs are $20,000 each month.
  • Superannuation ($3,000), rent ($3,000), energy bills ($2,000), miscellaneous ($2,500) are all paid monthly.
  • General couriering work amount to $1,000 per month for brochure movement around the region.
  • Rates are paid once in October of $5,000.

Requirements:

Respond to the following by completing the template and prepare a report of recommendations in 300-400 words to answer

B1 Cash budget for each month for ACA Travel Agency, (complete template below) with the view to recommendations to the owner whether they are able to pay $65,000 cash for the computer and printing equipment at the end of December 201X.  

B2 Outline actions to rectify the problem if the balance at the end of December 201X was negative  

B3   Identify people to consult and inform in relation to reporting and financial responsibilities in this case 

The cash budget you have just completed needs to be modified after some negotiations based on the policy and procedures of ACA Travel Agency and the Business plan.

  • The owner estimates $70,000 sales/commission for each month to remain
  • With sales averaging 90% cash and 10% in credit sales, debtors for September were $6,000
  • Purchases average 30% of sales
  • Bank Balance at the start of the quarter was $4,000
  • All other details remain same as above

Respond to the following by completing the template and prepare a report of recommendations in 300-400 words to answer 

B4 Prepare a REVISED cash budget for each month for ACA Travel Agency, (complete template below) with the above information view to making recommendations to the owner whether they can pay $65,000 cash for the computer and printing equipment at the end of the third month (December).

B5   Justify the REVISED cash budget

B6 Identify personnel you to consult and inform in relation to the finalisation of the budget and how have these modifications effected the decision to revise the Cash Flow budget?

B7 Using the initial and revised “Cash Flow budgets” outline reasons behind this type of budget used and the monitoring needs to be undertaken.  

Travel Agency needs some training for the staff and have contacted AAI Training Consultant to help. AAI Training is a small training business focusing on the Travel agency customer service improvement.

The owner over the last 4 years of AAI training has realised that the credit terms are best described at Net 30.

AAI Training have in their Terms of Service that 10% must be paid when the consultation training agreement is signed. The remainder is billed on completion of the training program.

So from experience with accounts receivable collections, the owner assumes the following when projecting cash receipts for the cash flow budget;

  • 70% of the accounts receivable are collected in the month following the completion of the training
  • 20% of the accounts receivable are collected in the second month following the completion of the training
  • 10% of the accounts receivable are collected in the third month following the completion of the training

C1 Using AAI Training Cash Receipts accounts receivable collection pattern and sales forecast, complete the template below to represent cash receipts projection for the first 6 months of 201X.

The actual sales for October, November and December of the previous year were $30,000. These cells have been inserted below.

Respond to the following by completing the template and prepare a report of recommendations in 200-300 words to answer

C2 Describe what “Net 30” means and whether this method of payment is appropriate for a small business such a AAI Training. Outline what the payment due date would be if the invoice was issued on the 10/7/201X    

C3  Outline FOUR (4) methods / ways of Financing that a AAI Training could use to raise capital for its future training expenditure or investment. (Name four sources of revenue)

ACA Travel Agency has now made an arrangement with Academies Tour company to sell their 3 hour tour to visitors. The tour is scheduled to run at 10.00am -1.00pm and 2.00-5.00pm, 5 days per week.

They hired a casual tour guide and have agreed to pay them $40 per hour.

Each tour is scheduled for 3 hours, but the tour guide is rostered for 4 hours for each tour.

Included in the tour is a “coffee and cake” at a café costing $2.00 for cake and $2.00 for coffee per person. There are 10 customers in each tour. Entrance to the museum after the tour is $10.00 for Academies Tour company.

Customers are charged $50.00 per tour.

Respond to the following by completing the template and prepare a report of recommendations

D1 Describe what Breakeven Point (BEP) is and a method of calculating BEP    

D2 Give a summary of fixed and variable costs, and outline 3 direct and indirect costs associated with the above tour

You are required to work out the breakeven point of each tour based on the details; complete all the shaded areas:

Fixed Costs

Variable Costs

Full time staff

$1,000 per week

Casual Staff

Rent

$1,000 per week

Coffee

Insurance

$300 per week

Cake

Utilities

$200 per week

Entry fee

D3 Using the above calculation, and show workings for the Breakeven point associated with the tour.  

D4 When calculating LABOUR for this tour, we include ON COSTS.

  List SIX (6) items which could be classified as on costs for labour in the scenario

D5 Outline recommendations you could make to the owner of Academies Tour company to make the tour more profitable in the long term

ACA Travel Agency has joined with The Event Management Company(TEMC) in charge of organizing 201X “Sculptures by the Sea” Event. You are required to assist the manager of TEMC to complete a cash flow forecast.  

Requirements:

Respond to the following by completing the template and prepare a proposal of recommendations in 200-300 words to answer;

E1 Input the information and data from the case scenario below, using computer accounting software (e.g. MYOB or MS Excel).

(You are to create your own template using the accounting software or use the template provided in Appendix 1 as a sample for excel.)

Your cash flow forecast will predict the bank balance at the end of each month for each month of the year.

The information you have at your disposal to complete this task is as follows:

  • The event management company has on its books four major events to run which will take place in March, May, August and October.
  • The total of $265,000 of tickets sales will be earned in the months that the events are held. The March event will earn $65,000, and the other events in May, August and October will earn $55,000, $75,000 and $70,000 respectively.
  • Expenditures on casual wages of $10, 000, travel and transport of $60, 000, and venue hire of $24,000 will occur only in the months in which the four events take place. These expenditures will be the same for each event. An extra amount of $2000 will also occur in April and November evenly, for travel and transport and for casual wages respectively,
  • Salaries and Office administration expenses respectively of $180,000 and $36,000 will occur evenly every month.
  • The company’s opening balance on 1 January is $10,000.
  • The company will receive a government grant of $40,000 in July.
  • The company will make a small income of total $6500 from Merchandising during the months in which the four events are staged. The event in March will earn $1,500 merchandising income, and the other events in May, August and October will earn $1,600, $1,800 and $1,600 respectively. 

E2 Outline at least two (2) recommendations to the owner of TEMC on how the decision-making path of the future business could be changed based on your completed budget

E3 Discuss who is required to be consulted and how the completed budget would be circulated to the stakeholders internally and externally. 

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[Accessed 26 September 2022].

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My Assignment Help. Travel And Tourism Management [Internet]. My Assignment Help. 2021 [cited 26 September 2022]. Available from: https://myassignmenthelp.com/free-samples/sit50116-travel-and-tourism-management/domestic-packages.html.


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