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5-Star Lux Hotel Hotel Configuration Total Bed 1 Bed 2 Bed 3 (Single) (Double) (Penthouse) 30 60 20 1 1 area per room (square metres) number of rooms first floor - 240 square metre second floor - 240 square metre third floor - 240 square metre number of rooms floor space square metres) planned occupancy rate (%) (open 365 days) average selling price (Stroomight) 1 3 4 3 4 3 4 9 12 180 360 60% 70% 220.00 350.00 3 180 50% 700.00 24 720 63% 345.00 Budgeted Income Statement Total Bed 1 Bed 2 Bed 3 (Single) (Double) (Penthouse) $ $ $ 433.620 1,073,100 383,250 $ 1,889,970 78,052 193.158 65.043 160.965 143.095 354,123 290.525 718,977 68.985 57.488 126,473 256,778 340,195 283.496 623,690 1.266,280 Accommodation Revenue Cost of Goods Sold Staff costs Purchases (toiletries, sheets, towels etc.) Total Cost of Goods Sold Gross Profit Operating Expenses Administration Costs Marketing Costs Utilities cost Maintenance cost Other operating expenses Total Operating Expenses Net Profit (s) 50.000 100,000 21.681 53.655 18,409 42.993 48,026 114,579 75.000 150,000 213.115 461,227 77.410 257,750 50.000 19.163 16,898 43,493 75,000 204,553 52.225 200,000 94499 78,299 206,097 300,000 878,895 387,385 staff cost are estimated to be 18% of accommodation revenue 2 purchases are estimated to be 15% of accommodation revenue marketing costs are estimated to be 5% of accommodation revenue Administration costs of $200,000 are allocated based on floor space s utilities cost has an allocation of $30 per square metre floor space plus 3% of accommodation revenue maintenance cost has an allocation of $50 per square metre floor space plus 9% of accommodation revenue Other operating expenses of $300,000 are allocated based on floor space Required: (a) Reconstruct the income statement using the contribution margin format, clearly show separate columns for each room type and maintaining a total column. (24 marks) (b) Calculate sales mix (based on accommodation revenue) for Lux Hotel. (3 marks) (c) Calculate the weighted average contribution margin (WACM) per night stay of each room type and total WACM (8 marks) (d) Determine the overall break-even level of rooms and number of night stay of each room type. (6 marks) (e) Calculate the margin of safety per room type. (6 marks) (9) Suppose that Lux Hotel desires to earn a $500,000 profit. Determine the occupancy rates required to earn the desired profit. (9 marks) [Total: 56 marks) 5-Star Lux Hotel Hotel Configuration Total Bed 1 Bed 2 Bed 3 (Single) (Double) (Penthouse) 30 60 20 1 1 area per room (square metres) number of rooms first floor - 240 square metre second floor - 240 square metre third floor - 240 square metre number of rooms floor space square metres) planned occupancy rate (%) (open 365 days) average selling price (Stroomight) 1 3 4 3 4 3 4 9 12 180 360 60% 70% 220.00 350.00 3 180 50% 700.00 24 720 63% 345.00 Budgeted Income Statement Total Bed 1 Bed 2 Bed 3 (Single) (Double) (Penthouse) $ $ $ 433.620 1,073,100 383,250 $ 1,889,970 78,052 193.158 65.043 160.965 143.095 354,123 290.525 718,977 68.985 57.488 126,473 256,778 340,195 283.496 623,690 1.266,280 Accommodation Revenue Cost of Goods Sold Staff costs Purchases (toiletries, sheets, towels etc.) Total Cost of Goods Sold Gross Profit Operating Expenses Administration Costs Marketing Costs Utilities cost Maintenance cost Other operating expenses Total Operating Expenses Net Profit (s) 50.000 100,000 21.681 53.655 18,409 42.993 48,026 114,579 75.000 150,000 213.115 461,227 77.410 257,750 50.000 19.163 16,898 43,493 75,000 204,553 52.225 200,000 94499 78,299 206,097 300,000 878,895 387,385 staff cost are estimated to be 18% of accommodation revenue 2 purchases are estimated to be 15% of accommodation revenue marketing costs are estimated to be 5% of accommodation revenue Administration costs of $200,000 are allocated based on floor space s utilities cost has an allocation of $30 per square metre floor space plus 3% of accommodation revenue maintenance cost has an allocation of $50 per square metre floor space plus 9% of accommodation revenue Other operating expenses of $300,000 are allocated based on floor space Required: (a) Reconstruct the income statement using the contribution margin format, clearly show separate columns for each room type and maintaining a total column. (24 marks) (b) Calculate sales mix (based on accommodation revenue) for Lux Hotel. (3 marks) (c) Calculate the weighted average contribution margin (WACM) per night stay of each room type and total WACM (8 marks) (d) Determine the overall break-even level of rooms and number of night stay of each room type. (6 marks) (e) Calculate the margin of safety per room type. (6 marks) (9) Suppose that Lux Hotel desires to earn a $500,000 profit. Determine the occupancy rates required to earn the desired profit. (9 marks) [Total: 56 marks)
