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Hotel Shu La La by Michael Scott Number of rooms ADR OCC RevPAR 240 2019 320 80% 256 REVENUE Rooms Food & Beverage Other Operated Departments Miscellaneous Income TOTAL REVENUE New Revenues Sales Mix 22,425,600 6,240,000 480,500 40,000 29,186,100 Fixed Cost Variable Cost New VC DEPARTMENTAL EXPENSES Rooms Food & Beverage Other Operated Departments TOTAL DEPARTMENTAL EXPENSES 5,157,888 3,868,800 120,125 9,146,813 TOTAL DEPARTMENTAL PROFITS 20,039,287 UNDISTRIBUTED OPERATING EXPENSES Administrative & General Marketing Utility Costs Property Operation & Maintenance TOTAL UNDISTRIBUTED OPERATING EXPENSES 4,669,776 2,918,610 291,861 350,233.2 8,230,480.2 GROSS OPERATING PROFIT 11,808,806.8 Franchise Fees Management Fees 897,024 708,528.408 INCOME BEFORE FIXED CHARGES 10,203,254.392 SELECTED FIXED CHARGES Property Taxes Insurance Reserve For Capital Replacement 420,000 62,000 180,000 EBITDA Depreciation Interest Expense Income Before Income Tax Income Tax @ 25% Net Income 9,541,254.392 236,000 20,000 9,285,254.392 2,321,313.598 6,963,940.794 Total CMR New CMR Based on the income statement and the information below: The income tax rate is 25%. Number of rooms is 240, and hotel operates at 80% occupancy. Room, Food & Beverage, and Other Operated Department expenses are directly variable with total sales revenue. Administrative & General: $2,400,000 is fixed, the remainder is variable with total revenue. Marketing $1,240,000 is fixed, the remainder is variable with total revenue. Utilities cost: $180,000 is fixed, the remainder is variable with total revenue. Property Operations & Maintenance: $188,000 is fixed, the remainder is variable with total revenue. Assume both franchise fees and management fees to be fixed. Answer the following questions. 5. 1. What is the revenue at breakeven point? 2. At breakeven point, what would the room revenues be? 3. At breakeven point, what is the occupancy at $320 ADR? 4. What revenue is required to achieve desired operating income income before income tax) of $12,000,000? the operating income income before income tax) of $12,000,000 achieved, how much would the food and beverage revenue be? 6. f rooms and food & beverage revenues increase by 10% and 15%, respectively, through price increases, what would the new breakeven be? fixed cost increases by $2,400,000, how much addtional revenues is needed to cover the additional fixed expenses? 8. What would the required revenue be if a net income of $9,000,000 is desired? 9. What would the occupancy rate be if a net income of $9,000,000 is achieved at $320 ADR? 10. If the depreciation expense decreases by 100,000, what would the breakeven point be? 11. If the hotel reduces all departmental expenses by 10%, what would the new breakeven be? 12. What would the required revenue be if a net income of $10,000,000 is desired and at the same time the fixed expenses incease by $1,200,000? 7. Place your final answers here You can use these columns to further explain your calculations 1 2 4 5 6 7 8 9 10 11 12 Final Answers BEP Revenue BEP Rooms Revenue BEP OCC Requied Revenue F&B Revenue New BEP Revenue Additional Revenue Requied Revenue Req Rev OCC BEP with decrease in depreciation BEP if DE decrease by 10% Requied Revenue Hotel Shu La La by Michael Scott Number of rooms ADR OCC RevPAR 240 2019 320 80% 256 REVENUE Rooms Food & Beverage Other Operated Departments Miscellaneous Income TOTAL REVENUE New Revenues Sales Mix 22,425,600 6,240,000 480,500 40,000 29,186,100 Fixed Cost Variable Cost New VC DEPARTMENTAL EXPENSES Rooms Food & Beverage Other Operated Departments TOTAL DEPARTMENTAL EXPENSES 5,157,888 3,868,800 120,125 9,146,813 TOTAL DEPARTMENTAL PROFITS 20,039,287 UNDISTRIBUTED OPERATING EXPENSES Administrative & General Marketing Utility Costs Property Operation & Maintenance TOTAL UNDISTRIBUTED OPERATING EXPENSES 4,669,776 2,918,610 291,861 350,233.2 8,230,480.2 GROSS OPERATING PROFIT 11,808,806.8 Franchise Fees Management Fees 897,024 708,528.408 INCOME BEFORE FIXED CHARGES 10,203,254.392 SELECTED FIXED CHARGES Property Taxes Insurance Reserve For Capital Replacement 420,000 62,000 180,000 EBITDA Depreciation Interest Expense Income Before Income Tax Income Tax @ 25% Net Income 9,541,254.392 236,000 20,000 9,285,254.392 2,321,313.598 6,963,940.794 Total CMR New CMR Based on the income statement and the information below: The income tax rate is 25%. Number of rooms is 240, and hotel operates at 80% occupancy. Room, Food & Beverage, and Other Operated Department expenses are directly variable with total sales revenue. Administrative & General: $2,400,000 is fixed, the remainder is variable with total revenue. Marketing $1,240,000 is fixed, the remainder is variable with total revenue. Utilities cost: $180,000 is fixed, the remainder is variable with total revenue. Property Operations & Maintenance: $188,000 is fixed, the remainder is variable with total revenue. Assume both franchise fees and management fees to be fixed. Answer the following questions. 5. 1. What is the revenue at breakeven point? 2. At breakeven point, what would the room revenues be? 3. At breakeven point, what is the occupancy at $320 ADR? 4. What revenue is required to achieve desired operating income income before income tax) of $12,000,000? the operating income income before income tax) of $12,000,000 achieved, how much would the food and beverage revenue be? 6. f rooms and food & beverage revenues increase by 10% and 15%, respectively, through price increases, what would the new breakeven be? fixed cost increases by $2,400,000, how much addtional revenues is needed to cover the additional fixed expenses? 8. What would the required revenue be if a net income of $9,000,000 is desired? 9. What would the occupancy rate be if a net income of $9,000,000 is achieved at $320 ADR? 10. If the depreciation expense decreases by 100,000, what would the breakeven point be? 11. If the hotel reduces all departmental expenses by 10%, what would the new breakeven be? 12. What would the required revenue be if a net income of $10,000,000 is desired and at the same time the fixed expenses incease by $1,200,000? 7. Place your final answers here You can use these columns to further explain your calculations 1 2 4 5 6 7 8 9 10 11 12 Final Answers BEP Revenue BEP Rooms Revenue BEP OCC Requied Revenue F&B Revenue New BEP Revenue Additional Revenue Requied Revenue Req Rev OCC BEP with decrease in depreciation BEP if DE decrease by 10% Requied Revenue