The owner of a local motel asked you to help him set up his budget with...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The owner of a local motel asked you to help him set up his budget with the following information. Its monthly Fixed Cost amount is $180,000, while its Variable Cost is $25 per room sold. Due to the seasonality of the business, the room rate ranges from $90 to much lower price depending on the number of expected guests. As a slow month is approaching, the owner will reduce his ADR to $75 to sell 6,000 rooms. However, the Variable Cost per room will remain the same due to the predetermined labor schedule. Using the information provided, complete the Pro Forma Income Statements (Operating Budget); and provide your answer to the question below. (If the data shows broken on your screen, please use Zoom-in/out function to have it displayed correctly. Or you also may need to expand it to the full-screen mode.) Slow month (6.000 rooms to sell @ lowered ADR of $75) Vertical Analysis (%) Revenues: (a) XXXXXX Variable Cost ($25 per room): (b) (h) Contribution Margin: (c) (i) Fixed Cost: (d)- EBT: le) (k) Таx (30%) XXXXXX Net Income: Provide your answer to the vertical analysis % of (I: Net Income %). Round your answer to the first decimal of the percentage (as in ##.#%). (Do not put "%" or "" in your answer. Just put the number. If you answer is 10.1%; then put 10.1. If your answer is negative, put "-" as in -10.1 for -10.1%. If you put in 0.9 the system will accept it as 0.9%) The owner of a local motel asked you to help him set up his budget with the following information. Its monthly Fixed Cost amount is $180,000, while its Variable Cost is $25 per room sold. Due to the seasonality of the business, the room rate ranges from $90 to much lower price depending on the number of expected guests. As a slow month is approaching, the owner will reduce his ADR to $75 to sell 6,000 rooms. However, the Variable Cost per room will remain the same due to the predetermined labor schedule. Using the information provided, complete the Pro Forma Income Statements (Operating Budget); and provide your answer to the question below. (If the data shows broken on your screen, please use Zoom-in/out function to have it displayed correctly. Or you also may need to expand it to the full-screen mode.) Slow month (6.000 rooms to sell @ lowered ADR of $75) Vertical Analysis (%) Revenues: (a) XXXXXX Variable Cost ($25 per room): (b) (h) Contribution Margin: (c) (i) Fixed Cost: (d)- EBT: le) (k) Таx (30%) XXXXXX Net Income: Provide your answer to the vertical analysis % of (I: Net Income %). Round your answer to the first decimal of the percentage (as in ##.#%). (Do not put "%" or "" in your answer. Just put the number. If you answer is 10.1%; then put 10.1. If your answer is negative, put "-" as in -10.1 for -10.1%. If you put in 0.9 the system will accept it as 0.9%)
Expert Answer:
Related Book For
Managerial Economics and Business Strategy
ISBN: 978-0071267441
7th Edition
Authors: Michael R. baye
Posted Date:
Students also viewed these accounting questions
-
Your brother has asked you to help him with choosing an investment. He has $7,800 to invest today for a period of two years. You identify a bank CD that pays an interest rate of 0.0500 annually with...
-
You are the owner of a local Honda dealership. Unlike other dealerships in the area, you take pride in your "No Haggle" sales policy. Last year, your dealership earned record profits of $1.5 million....
-
You are asked by the owner of a local hotel chain to develop a customer satisfaction survey to determine the percentage of customers who are dissatisfied with service. In the past year, 20,000...
-
How many moles of carbon dioxide, CO2, are in a 22 gram sample of the compound?
-
The Assembly Department produced 5,000 units of product during March. Each unit required 2.20 standard direct labor hours. There were 11,500 actual hours used in the Assembly Department during March...
-
Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown on the next page. Required: 1. Calculate the unit cost for...
-
Define flowcharting.
-
The manager of Perrottis Pizza collects data concerning customer complaints about delivery. Pizza arrives late, or the wrong pizza is delivered. Problem Frequency Topping stuck to box...
-
You are considering a new product launch. The project will cost $1,850,000, have a 4-year life, and have no salvage value; depreciation is straight-line to 0. Sales are projected at 180 units per...
-
Bob and Susan Menzel are planning to open a food service operation and have heard about operating leverage. They are forecasting annual sales and depreciation expenses as follows: Annual sales Food...
-
You've observed the following returns on Leo's Lightbulbs stock over the past five years: 12 percent, -3 percent, 15 percent, 14 percent, and -1 percent. Suppose the average T-bill rate over this...
-
The Jumbolith Press Company is engaged in the manufacture of large-sized presses under specific contracts and in accordance with customers' specifications. Customers are required to advance 25...
-
A single number that estimates the value of an unknown parameter is called a ________________ estimate.
-
Your client, a distiller of alcohol, suggests that it is not necessary for you to observe the taking of physical inventories at his plants. The client points out that the Treasury Department's...
-
You have been engaged by the management of Alden to review its internal control structure for the purchase, receipt, storage, and issue of raw materials. You have prepared the following comments...
-
Tell me about a conflict youve experienced at work and how you handled it.
-
Consider the spring assemblage system shown. what is its degree of freedom (DOF) write the equation of motion obtain the mass matrix obtain the stiffness matrix determine the natural frequencies...
-
Borrowing costs should be recognised as an expense and charged to the profit and loss account of the period in which they are incurred : A. If the borrowing costs relate to qualifying asset B. If the...
-
Provide an intuitive explanation for why a buy one, get one free deal is not the same as a half-price sale.
-
Based on the information given, indicate whether the following industry is best characterized by the model of perfect competition, monopoly, monopolistic competition, or oligopoly. a. Industry A has...
-
The supply curve for product X is given by Qsx = 340 + 10Px. a. Find the inverse supply curve. b. How much surplus do producers receive when Qx = 350? When Qx = 1,000?
-
In the Bernie Madoff case, some investors who lost money are concerned about the potential for "clawback" suits that might be brought by the trustee in charge of liquidating Madoff's firm. Such suits...
-
The Institute of Internal Auditors states in its November 2005 issue of The Tone at the Top that businesses can rely on an industry standard, Znternal ControlIntegrated Framework, to comply with...
-
In their landmark book that was published in 1966, Ethical Standards of the Accounting Profession, John Carey and William Doherty state: The code [of ethics] in effect is an announcement that, in...
Study smarter with the SolutionInn App