Question
Moon Star Hotel is a bed and breakfast hotel serving airport guests in Moon Township area. You are the hotels manager and you prepared the
- Moon Star Hotel is a bed and breakfast hotel serving airport guests in Moon Township area. You are the hotels manager and you prepared the hotels overhead budget for February 2020 as appear below:
|
|
|
|
Activity level |
| 90 | guests |
Variable overhead costs: |
|
| |
Supplies | $ | 234 |
|
Laundry.. |
| 330 |
|
Fixed overhead costs: |
|
|
|
Utilities.. |
| 420 |
|
Salaries and wages. |
| 4,490 |
|
Depreciation.. |
| 2,666 |
|
Total overhead costs | $ | 8,140 |
|
The hotels variable overhead costs increase or decrease based on the activity level (by the number of guests). For 90 guests your total overhead costs is $8,140 as seen above.
It is expected that the number of guests would increase from 90 to 120 for February. In that case, what would be your total budgeted overhead costs for February? (based on 120 guests).
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