HOMEWORK Chapter 9: Budgets Following is information for the Rooms Department for the Ocean Front Hotel for the first six periods of the year. Room Revenue $8,713,000 Transient Rooms Sold Group Rooms Sold Total Rooms Sold 83,730 16,270 100,000 Operating Expenses Linen Cleaning Supplies Guest Supplies Outside Services Laundry Concierge Expense Office Supplies Reservation Expense Reservation Department Fixed Res Center Cost Variable Res Center Cost at $6 per transient res. Total Reservation Expense All other Expense $31,100 $24,000 $104,800 $24,000 $80,500 $60,000 $19,200 $150,000 $180,000 $251,200 $581,200 $120,000 Total Operating Expenses $1,044,800 Total Operating Expense Percentage 12.0% Problem 1 Use the following formulas to calculate each one of the line items: They will be used to prepare the annual budget for next year. Round the average cost per period to whole dollars, round the cost per occupied room to whole cents, and round the percentage of sales to two decimals (i.e 0.33%). Use the laundry and reservation information as supplied. 1. Linen - Calculate the average cost per period 2. Cleaning Supplies - Calculate the average cost per occupied room 3. Guest Supplies - Calculate the average cost per occupied room 4. Laundry - Calculate the average cost per period 5. Concierge Level Expense - Calculate as a percentage of total room sales 6. Office Supplies - Calculate as a percentage of total room sales 7. All other expense - Calculate the average cost per period Problem 2 Prepare the annual operating expense budget for the next year using the formulas from problem #1 and the following assumptions: Remember there are 13 accounting periods in a fiscal year, each with four weeks and 28 days. Round the Concierge Expense and Office Supplies to the nearest dollar. Room Revenue $19,184,000 Transient Rooms Sold Group Rooms Sold Total Rooms Sold 184,000 34,000 218,000 Operating Expense Annual Budget 1. Linen 2. Cleaning Supplies 3. Guest Supplies 4. Laundry 5. Concierge Expense 6. Office Supplies 7. All Other Expense