1. (12 points) An 75-room hotel forecasts its average room rate to be S68.00 for the next year with 75% occupancy rate. The rooms department fixed wage cost including benefits is $173,500 per year. The variable wage cost for housekeeping employees is $10.00 per hour and it takes half an hour to clean a room. Employee benefits for the housekeeping employees are 12% of wages. Linens, laundry supplies, and other variable costs are $550 per occupied room. The hotel also has a 50-seat dining room. Breakfast sales revenue is derived solely from overnight guests staying in the hotel. On average, one person occupies 40% of rooms occupied, and the remainder is double occupied On average, 75% of overnight guests eat breakfast, with an average check of $5.95. Lunch seat turnover is 1.25 with an average check of $8.50. Diner seat turnover is 0.75 with an average check of $14.50. The dining room is open 365 days a year for all three meals. Direct dining room operating costs (food, wages, supplies, and other terms) are 80% of dining room sales revenue indirect costs (energy administration, marketing, and other items) are estimated at $880,000 for the next year Calculate the budgeted operating income of the hotel for the next year Budgeted Income Statement Account item Calculation Amount (S) Sales Revenue (Rooms) Operatinge Total operating expenses Rooms dept. contributory income Sales Revenue (Dinning room) Total dining room sales revenue Direct cost expenses Dinning room contributory income Rooms contributory income Dining room contributory income Total dept. contributory income Indirect costs Total combined operating income 2. (8 points) With reference to #1 on page 1, assume that, at the end of next year, the rooms were sold at an average rate of $68.50 and that actual housekeeping wages (before employee benefits) were $109,802. Analyze room sales revenue for sales volume and price variance (assuming half an hour to clean each room occupied) Sales Revenue Variances Budget [ Actual [21,700 rooms sold Budget Variance $ Price variance [ Sales volume variance [ Budget Variance $ Budget Cost Variances Budget [ Actual [ l* Budget Variance $ *Actual wage rate: I Cost and Sales Volume Variances Cost variance [ Sales volume [ Budget Variance $ 1. (12 points) An 75-room hotel forecasts its average room rate to be S68.00 for the next year with 75% occupancy rate. The rooms department fixed wage cost including benefits is $173,500 per year. The variable wage cost for housekeeping employees is $10.00 per hour and it takes half an hour to clean a room. Employee benefits for the housekeeping employees are 12% of wages. Linens, laundry supplies, and other variable costs are $550 per occupied room. The hotel also has a 50-seat dining room. Breakfast sales revenue is derived solely from overnight guests staying in the hotel. On average, one person occupies 40% of rooms occupied, and the remainder is double occupied On average, 75% of overnight guests eat breakfast, with an average check of $5.95. Lunch seat turnover is 1.25 with an average check of $8.50. Diner seat turnover is 0.75 with an average check of $14.50. The dining room is open 365 days a year for all three meals. Direct dining room operating costs (food, wages, supplies, and other terms) are 80% of dining room sales revenue indirect costs (energy administration, marketing, and other items) are estimated at $880,000 for the next year Calculate the budgeted operating income of the hotel for the next year Budgeted Income Statement Account item Calculation Amount (S) Sales Revenue (Rooms) Operatinge Total operating expenses Rooms dept. contributory income Sales Revenue (Dinning room) Total dining room sales revenue Direct cost expenses Dinning room contributory income Rooms contributory income Dining room contributory income Total dept. contributory income Indirect costs Total combined operating income 2. (8 points) With reference to #1 on page 1, assume that, at the end of next year, the rooms were sold at an average rate of $68.50 and that actual housekeeping wages (before employee benefits) were $109,802. Analyze room sales revenue for sales volume and price variance (assuming half an hour to clean each room occupied) Sales Revenue Variances Budget [ Actual [21,700 rooms sold Budget Variance $ Price variance [ Sales volume variance [ Budget Variance $ Budget Cost Variances Budget [ Actual [ l* Budget Variance $ *Actual wage rate: I Cost and Sales Volume Variances Cost variance [ Sales volume [ Budget Variance $