Problem (10 points). Grieg Luxury Hotel has divided its downtown Atlanta hotel operations into several cost and revenue centers. One of these cost centers is the Housekeeping Department. Mr. Kleen, the head of the department is responsible for purchasing all cleaning materials, managing all employees, purchasing cleaning equipment, and other items that are directly related to the department. Mr. Kleen is evaluated on how well he keeps his costs in line with his budget. For the month of May of the current year, he received the attached performance report from the accounting department of the hotel The general manager of the hotel wrote a brief memo to Mr. Kleen saying that although you are not too far over budget. I expect my department managers to meet the budget that I have given them or stay under budget. You need to keep that in mind for future months." REQUIRED: (1) (2) Comment on the format of the performance report prepared for the Housekeeping Department. Redraft the performance report in a format that conforms to good principles of responsibility reporting. What other problems do you feel that the hotel may have in its performance evaluation of its departments? Explain. (3) $ GRIEG LUXURY HOTEL HOUSEKEEPING DEPARTMENT PERFORMANCE REPORT FOR MONTH OF MAY Actual Cleaning Supplies S 15,000 Direct Labor--Housekeeping Staff 35,400 Depreciation on Cleaning Equipment 10,500 Office Supplies 1.250 Department Manager's Salary--Mr. Kleen 2,500 Utilities Cost--Allocated Based on Square Footage Occupied 3,200 Miscellaneous Cleaning Tools 900 General Overhead-Allocated Based on Number of Employees in Department 2,350 Total Costs $ 71,100 Budget 15.200 36,200 10,000 1.300 2,500 2.950 885 2.000 $ 71,035