Problem 13-59 (Algo) Prepare Budgeted Financial Statements (LO 13-6,7) HomeSuites is a chain of all-suite, extended-stay hotel properties. The chain has 16 properties with an average of 150 rooms in each property. In year 1, the occupancy rate (the number of rooms filled divided by the number of rooms available) was 70 percent, based on a 365-day year. The average room rate was $204 for a night. The basic unit of operation is the night which is one room occupied for one night The operating income for year 1 is as follows. HomeSuites Operating Income Year 1 Sales revenue Lodging $125,092,800 Food & beverage 13,490, 400 Miscellaneous 6,745,200 Total revenues $145,328,400 Costa Labor $ 40,931,200 Food beverage 11,037,600 Miscellaneous 7.971,600 Management 2,512,000 Utilities, etc. 32,000,000 Depreciation 8,000,000 Marketing 25,120,000 Other costs 8,012.000 Total costs $135,584,400 Operating profit $ 9,744,000 In year 1, the average fixed labor cost was $412,000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs (management, marketing, and other costs) are fixed for the firm In year 1, the average fixed labor cost was $412,000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are foed for each property. The remaining costs (management, marketing, and other costs) are fixed for the firm, At the beginning of year 2, HomeSuites will open four new properties with no change in the average number of rooms per property The occupancy rate is expected to remain at 70 percent. Management has made the following additional assumptions for year 2. The average room rate will increase by 5 percent. Food and beverage revenues per night are expected to decline by 20 percent with no change in the cost The labor cost (both the fixed per property and variable portion) is not expected to change. . The miscellaneous cost for the room is expected to increase by 25 percent, with no change in the miscellaneous revenues per Utilities and depreciation costs (per property) are forecast to remain unchanged. Management costs will increase by 8 percent, and marketing costs will increase by 10 percent. . Other costs are not expected to change room Required: Prepare a budgeted income statement for year 2 (Round your per unit average cost calculations to 2 decimal places.) HOMESUITES Operating Income Other costs are not expected to change. 0515 w mirease y v percent Required: Prepare a budgeted income statement for year 2. (Round your per unit average cost calculations to 2 decimal places.) $ 0 HOMESUITES Operating Income Year 2 Sales revenue Lodging Food & beverage Miscellaneous Total revenues Costs Labor Food & beverage Miscellaneous Management Utilities, etc Depreciation Marketing Other costs Total costs Operating profit $ $ Problem 13-59 (Algo) Prepare Budgeted Financial Statements (LO 13-6,7) HomeSuites is a chain of all-suite, extended-stay hotel properties. The chain has 16 properties with an average of 150 rooms in each property. In year 1, the occupancy rate (the number of rooms filled divided by the number of rooms available) was 70 percent, based on a 365-day year. The average room rate was $204 for a night. The basic unit of operation is the night which is one room occupied for one night The operating income for year 1 is as follows. HomeSuites Operating Income Year 1 Sales revenue Lodging $125,092,800 Food & beverage 13,490, 400 Miscellaneous 6,745,200 Total revenues $145,328,400 Costa Labor $ 40,931,200 Food beverage 11,037,600 Miscellaneous 7.971,600 Management 2,512,000 Utilities, etc. 32,000,000 Depreciation 8,000,000 Marketing 25,120,000 Other costs 8,012.000 Total costs $135,584,400 Operating profit $ 9,744,000 In year 1, the average fixed labor cost was $412,000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs (management, marketing, and other costs) are fixed for the firm In year 1, the average fixed labor cost was $412,000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are foed for each property. The remaining costs (management, marketing, and other costs) are fixed for the firm, At the beginning of year 2, HomeSuites will open four new properties with no change in the average number of rooms per property The occupancy rate is expected to remain at 70 percent. Management has made the following additional assumptions for year 2. The average room rate will increase by 5 percent. Food and beverage revenues per night are expected to decline by 20 percent with no change in the cost The labor cost (both the fixed per property and variable portion) is not expected to change. . The miscellaneous cost for the room is expected to increase by 25 percent, with no change in the miscellaneous revenues per Utilities and depreciation costs (per property) are forecast to remain unchanged. Management costs will increase by 8 percent, and marketing costs will increase by 10 percent. . Other costs are not expected to change room Required: Prepare a budgeted income statement for year 2 (Round your per unit average cost calculations to 2 decimal places.) HOMESUITES Operating Income Other costs are not expected to change. 0515 w mirease y v percent Required: Prepare a budgeted income statement for year 2. (Round your per unit average cost calculations to 2 decimal places.) $ 0 HOMESUITES Operating Income Year 2 Sales revenue Lodging Food & beverage Miscellaneous Total revenues Costs Labor Food & beverage Miscellaneous Management Utilities, etc Depreciation Marketing Other costs Total costs Operating profit $ $