Hello, i have a work to do in accounting and i totally blocked on "session 2 - Cost Volume profit Analysis"
I know there is lot to talk about, but I really don't know what should i say.
A help on this question would be so much appreciated!
thanks a lot!
Question 1: Usefulness of Management Accounting in a Hotel Session 1 - Introduction to Management Accounting Amy Richardson had been a well-paid sales manager of a major hotel chain for 15 years. Due to a hotel (enter your answer here) owner's illness, Amy was offered the opportunity to purchase a hotel near a seaside vacation area she had often visited. After obtaining a lawyer and a financial accountant to assist her, Amy did an analysis of the most recent financial statements of the hotel. Since the hotel had consistently shown a profit during the past few years, Amy thought that the price of the hotel was reasonable, so she decided to purchase the hotel. She resigned her position, obtained a loan, and purchased the hotel. During the first year as a hotel manager, Amy received an offer from a tour operator who proposed to guarantee a considerable number of room reservations, including during the off-season. However, she turned down the offer because the tour operator asked for a 20% price reduction compared to the regular room rate Session 2 - Cost-Volume-Profit Analysis A few weeks later, she decided to shut down the restaurant, located in the main building of the hotel, in order (enter your answer here) to save expenses. With regard to general expenses, she was particularly concerned with the high room cleaning and service costs. On the sales side, although the reservations for the cheaper standard rooms were a bit sluggish, the more expensive large-size superior rooms had a very good occupancy rate of over 90% The following year, there was a severe economic downturn and also a very bad weather season that reduced the number of guests and also caused a resulting mold situation in the hotel building that required expensive repair work. Amy ran short of cash, became emotionally distraught, and eventually had to sell the hotel at a significant loss. Session 3 - Using Relevant Costs To Make Short-Term Decisions Required: (enter your answer here) Analyze Amy's purchase decision and the subsequent events using key management accounting tools and concepts. Make sure that you clearly indicate how each tool/concept could be used to explain potential management errors that Amy had made and could have helped her to improve decision-making and the financial results of the business. Hint: There are tools from all five sessions of the course that are potentially relevant to analyze this managerial situation. Credits will be awarded according to the following scheme: Session 4 - Cost Management Using Full Costs Session 1 - Introduction to Management Accounting (enter your answer here) Session 2 - Cost-Volume-Profit Analysis Session 3 - Using Relevant Costs to Make Short-Term Decisions Session 4 - Cost Management Using Full Costs Session 5 - Budgeting Enter your analysis pertaining to each session directly into the spaces provided below. Session 5 - Budgeting