Prepare draft event budgets
Based on the information provided below, prepare the event budget
The event committee has asked you to prepare two alternative revenue statement budgets based on ticket prices of $100.00 and $200.00. They wish to determine the most feasible and profitable alternative for their organization.
From previous experience in projects, it has been identified that a specific percentage of ticket sales revenue is spent on additional expenses, such as advertising, printing, decorating the venue and entertainment for the event. These expenses need to be included in the revenue statement budgets.
Additional expenses
|
% of revenue
|
Advertising
|
1%
|
Printing
|
0.25%
|
Room Decoration
|
3%
|
Entertainment
|
5%
|
Total
|
9.25%
|
Calculate the revenue for both ticket prices
No. of tickets
|
Ticket price = $100.00
|
Ticket price = $200.00
|
350
|
$ 35,000.00
|
$ 70,000.00
|
Prepare alternative revenue statement budgets using the information you have accumulated so far.
|
Alternative 1
|
% of
sales
|
Alternative 2
|
% of sales
|
|
350 tic
$100
|
x
|
|
350
$200
|
tic
|
x
|
|
Sales
|
$
|
%
|
$
|
%
|
Revenue sales
|
from ticket
|
35,000.00
|
$
|
|
$ 70,000.00
|
|
Cost of goods sold
|
|
|
|
|
Food cost
|
898.16
|
$
|
2.56%
|
$ 898.16
|
1.2%
|
Beverage cost
|
1,898.71
|
$
|
5.42%
|
$ 1,898.71
|
2.71%
|
Total cost of goods
|
2,796.87
|
$
|
7.99%
|
$ 2,796.87
|
3.9%
|
Gross profit
|
32,203.13
|
$
|
92%
|
$ 67,203.13
|
96%
|
Expenses
|
|
0%
|
|
0%
|
Labor costs
|
9,724.00
|
$
|
27.78%
|
$ 9,724.00
|
13.89%
|
Venue
|
2,000.00
|
$
|
5.71%
|
$ 2,000.00
|
2.85%
|
Stationery Postages
|
items /
|
225.00
|
$
|
0.64%
|
$ 225.00
|
0.32%
|
Communication
|
$250
|
0.71%
|
$ 250.00
|
0.35%
|
Event staff uniform
|
650.00
|
$
|
1.85%
|
$ 650.00
|
0.92%
|
Hire equipment
|
audio-visual
|
3,500.00
|
$
|
10%
|
$ 3,500.00
|
5%
|
Floral arrangements
|
4,000.00
|
$
|
11%
|
$ 4,000.00
|
6%
|
Stage and lighting hire
|
5,500.00
|
$
|
16%
|
$ 5,500.00
|
8%
|
Food and service equipment lease
|
1,570.00
|
$
|
4%
|
$ 1,570.00
|
2%
|
Master of ceremonies
|
900.00
|
$
|
3%
|
$ 900.00
|
1%
|
Consultant fees
|
4,000.00
|
$
|
11%
|
$ 4,000.00
|
6%
|
Linen hire
|
1,870.00
|
$
|
5%
|
$ 1,870.00
|
3%
|
Advertising
|
350.00
|
$
|
1%
|
$ 700.00
|
1%
|
Printing
|
87.50
|
$
|
0%
|
$ 175.00
|
0%
|
Room decor
|
1,050.00
|
$
|
3%
|
$ 2,100.00
|
3%
|
Entertainment
|
1,750.00
|
$
|
5%
|
$ 3,500.00
|
5%
|
Total expenses
|
37,426.50
|
$
|
107%
|
$ 40,664.00
|
58%
|
Profit/loss
|
(5,223.37)
|
$
|
-15%
|
$ 26,539.13
|
38%
|
Identify the breakeven ticket price to achieve 25% profit.
Calculate the revenue for the break-even ticket price.
No. of tickets sold
|
Ticket price =
|
350
|
150
|
Prepare alternative revenue statement budgets using the information you have accumulated so far.
|
Amount ($)
|
% of sales
|
Sales
|
$
|
%
| |
Revenue from ticket sales
|
$52,500.00
|
|
less: Cost of goods sold
|
|
| |
Food cost
|
$
898.16
|
1.7%
|
Beverage cost
|
$
1,898.71
|
3.61%
| |
The total cost of goods
|
$
2,796.87
|
5.32%
| |
Gross profit
|
$
49,703.13
|
94.67%
|
Expenses
|
|
Labor
|
Labor costs
|
$
9,724.00
|
18.52%
|
Venue
|
$
2,000.00
|
3.80%
| |
Stationery items / Postages
|
$
225.00
|
0%
|
Communication
|
$
250.00
|
0%
|
Event staff uniform
|
$
650.00
|
1.23%
|
Hire audio-visual equipment
|
$
3,500.00
|
6.66%
|
Floral arrangements
|
$
|
8%
|
|
4,000.00
|
| |
Stage and lighting hire
|
$
5,500.00
|
10.4%
|
Food and service equipment lease
|
$
1,570.00
|
2.99%
| |
Master of ceremonies
|
$
900.00
|
1.71%
| |
Consultant fees
|
$
4,000.00
|
8%
| |
Linen hire
|
$
1,870.00
|
3.56%
|
Advertising
|
$
525.00
|
1%
|
Printing
|
$
131.25
|
0.24%
| |
Room decor
|
$
1,575.00
|
3%
|
Entertainment
|
$
2,625.00
|
5%
|
Total expenses
|
$
39,045.25
|
74.37%
|
Profit/loss
|
$
10,657.88
|
20.30%
|
Part D
Circulate the draft budget to the event committee for input.
Prepare an email with the detailed draft budget, including two alternatives and breakeven price, seeking input from the relevant stakeholders (those who gave input in 2.4). Email should be 150-200 words long.
Respected sir,
Can you please look at attached files and recommend some tips for further budgeting? The price at $100 and $200 and breakeven price of 150 dollars with the costs and expenses are listed and drafted into income statement. I need your input. Other stakeholders have recommended several things which I also have attached, this budget is going to give you an action plan and clear picture of where your money is ending up each month with each event. I have kept this in mind that maintaining a budget for business on a regular basis can help track expenses, analyze income, and anticipate future financial needs.
Your draft must address the following performance criteria/ performance checklist.
To be assessed as satisfactory (S) in this assessment task the participant needs to demonstrate competency in the following critical aspects of evidence
|
S
|
N/S
|
Trainer/Assessor to complete
(Comment and feedback to students)
|
Identified the scope and nature of required budget and the data and data source for budget preparation.
| | |
|
Analysed the potential impact on budget by internal and external factors.
| | |
|
Engaged colleagues and required stakeholders to get input during budget planning process.
| | |
|
Drafted budget with estimated income and expenditures based on valid, reliable and relevant information.
| | |
|
Reflected organisational objectives while drafting budget.
| | |
|
Analysed and provided options and recommendations on the budget in clear format and circulated it to the relevant stakeholders for their input.
| | |
|
Liaised and negotiated with stakeholders on potential budgets requirements.
| | |
|
Accessed and sorted all information required for budget preparation
| | |
|
Share with your friends: |
