Direct Labor Budget for a Service Business

Ambassador Suites Inc. operates a downtown hotel property that has 300 rooms. On average, 80% of Ambassador Suites rooms are occupied on weekdays and 40% are occupied during the weekend. The manager has asked you to develop a direct labor budget for the housekeeping and restaurant staff for weekdays and weekends. You have determined that the housekeeping staff requires 30 minutes to clean each occupied room. The housekeeping staff is paid $14 per hour. The housekeeping labor cost is fully variable to the number of occupied rooms. The restaurant has six full-time staff (eight-hour day) on duty, regardless of occupancy. However, for every 60 occupied rooms, an additional person is brought in to work in the restaurant for the eight-hour day. The restaurant staff is paid $12 per hour.

Determine the estimated housekeeping, restaurant, and total direct labor cost for an average weekday and average weekend day. Format the budget in two columns, labeled as weekday and weekend day. Enter percentages as whole numbers.

Ambassador Suites Inc.
Direct Labor Cost Budget
For a Weekday or a Weekend Day
	Weekday	Weekend Day
Room occupancy
Room capacity
Occupied percent	x%	x%
Rooms occupied
Housekeeping
Number of minutes to clean a room	x	x
Total minutes
Total hours
Labor rate per hour	x $	x $
Housekeeping daily labor budget	$	$
Restaurant staff
Base restaurant staff
Incremental 60 room blocks	+	+
Total staff
Hours per day	x	x
Total hours
Labor rate per hour	x $	x $
Restaurant staff daily labor budget	$	$
Total daily labor budget	$	$