One of the kitchens in a large Las Vegas hotel complex produces fresh local fruit jam. The jam is placed into expensive jars molded with the hotel's logo, a depiction of tumbling dice. The jam is labelled "Lucky Dip". For several years a jar of "Lucky Dip" has been given as a complimentary gift to all guests staying in the hotel, and the marketing department feel that this promotion has been well received by guests. Some jam is also sold through the hotel's gift shop.

The hotel accountant has provided the head chef with the following schedule that outlines the anticipated demand for jam in the next four months.

Complimentary Shop sales October 1,000 jars 100 jars November 800 jars 80 jars December 1,200 jars 120 jars January 700 jars 70 jars The chef likes to have 10 per cent of next month's jam demand already produced and in stock by the month end. On 30th September, 120 jars of "Lucky Dip" were held as inventory.

The chef runs a fruit stocking policy of holding 5 per cent of next month's fruit needs in inventory. On 30th September, 20 kg s of fruit was held in inventory. Each jar of "Lucky Dip" requires 0.5 kgs of fruit. It has been estimated that the fruit will cost $2 per kg during the year's final quarter.

Required:

What's purchases budget for fruit for October and November.

Problem 9.7

The Sea Breeze is a 200-room family resort hotel in Blackpool, Northern England that is open 7 days per week. It has one restaurant and restaurant sales are only made to hotel guests. During the next quarter beginning 1st April, the rooms manager anticipates an average occupancy of 70 per cent and an average of 2.5 people in each occupied room. Restaurant records indicate that 90 per cent of guests eat breakfast, 30 per cent eat lunch and 60 per cent eat dinner at the restaurant. The average contribution earned from covers served in the restaurant is 4 for breakfast, 8 for lunch and 12 for dinner.

Required:

Calculate the estimated contribution (revenue - variable costs) that will be earned at Sea Breeze's restaurant in the next quarter beginning 1st April.