Question
A large, downtown hotel allocated all of its restaurant labor costs on the basis of revenue dollars. This hotel had seven restaurant outlets that were
A large, downtown hotel allocated all of its restaurant labor costs on the basis of revenue dollars. This hotel had seven restaurant outlets that were vastly different, including banquet, room service, a bar, a 24-hour restaurant, and a fine dining facility. There are obvious differences in the way labor resources are consumed in these various outlets. However, the most glaring example was in the banquet operation. Since banquets were not regularly scheduled events, the banquet manager hired servers as contract laborers. These costs were not included in the restaurant labor pool. Suggest at least two steps the manager should take to ensure that all labor is factored into the profitability analysis. Suggest the variance analysis that would pinpoint the issue with the budget. Provide specific examples.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To ensure that all labor costs are factored into the profitability analysis the manager should take the following steps 1 Include Contract Labor Costs ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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