b.

Assume that at the end of next year, acutal sales revenue was based on 21,700 rooms occupied at an average room rate of $68.40. Actual housekeeping wages (before employee fringe benefits) were $108,208. Analyze rooms sales revenue for price and sales volume variances, and housekeeping wages for cost, quantity, and sales volume variances. Assume it took 32 minutes to clean each room occupied (sold).

Values needed to answer this question are shown in a. which I have answered. Thanks!

HTM 241 Derek Beaver

Ch9 Homework

P9.10

a.

Rooms:

Budgeted rooms to be sold = 80 * 75% * 365 = 21,900

Forecasted ADR = $68

Revenue = 80 * 75% * 365 * $68 = $1,489,200

Variable costs:

Wages: 21,900 * 0.5 * $9 = $98,550

Housekeeping benefits: $98,550 * 18% = $17,739

Others: 21,990 * $2.75 = $60,472.50

Total variable costs: $176,761.50

Cost of sales = $98,550

Fixed Costs:

Wage cost: $186,000

Total rooms direct costs = $176,761.50 + $186,000 = $284,550 (2+3)

Rooms Contributory Income(1-2-3)

$1,489,200 - $176,761.50 - $186,000 = 1,126,438.50

F&B

Revenue from F&B

Number of breakfast guests

21,900 * (1 + 40%) = 30,660

Revenue Total: $804,113.25

Breakfast: 30,660 * 80% * $6.50 = $159,432

Lunch: 50 * 1.5 * $8.95 * 365 = $245,006.25

Dinner: 50 * 2.0 * $10.95 * 365 = $399,675

Variable cost:$804,113.25 * 78% = $627,208.34

Fixed cost:0

Restaurant Contributory Income: $176,904.91

Indirect costs:$580,800

Net Income:(4+8)-9

($1,126,438.50 + $176,904.91) - $580,800 = $722,543.41

b. Variances

Price, volume, and total revenue

Volume Price Total

Actual Actual

21,700 $68.40 1,484,280 (Unfavorable)

Actual Budgeted

21,700 $68 1,475,600 (Unfavorable

Budgeted Budgeted

21,900 $68 $1,489,200

Chegg Help

This is the part Im confused about

Cost, volume and total expense

Volume Cost Total

Actual Actual

21,700 $108,208

Actual Budgeted

21,700 * 32

694,400

Budgeted Budgeted

21,900 $98,550