Problem: PERFORMANCE EVALUATION

Julie Miller supervisor of housecleaning for Hotel Minto, was surprised by her summary report for March given below.

Hotel Minto Housekeeping Performance Report For the month of March
Actual	Budget	Variance	%Variance
$198,511	$186,400	$12,111 U	6.497% U

Julie was disappointed. She thought she had done a good job controlling housekeeping labor and towel usage, but her performance report revealed an unfavorable variance of $12,111. She had been hoping for a bonus for her good work, but now expected a series of questions from her manager.

The cost budget for housekeeping is based on standard costs. At the beginning of a month, Julie receives a report from Hotel Mintos Sales Department outlining the planned room activity for the month. Julie then schedules labor and purchases using this information. The budget for the housekeeping was based on 8,000 room nights. Each room night is budgeted based on the following standards for various materials, labor, and overhead:

Shower supplies	3 bottles @ $0.35 each
Towels	1 @ $2.25
Laundry	10 lbs @ $0.35 a lb.
Labor	hour @ $14.00 an hour
VOH	$7.00 per labor hour
FOH	$6 a room night (based on 8,000 room nights

With 8,900 room nights sold, actual costs and usage for housekeeping during April were:

$9,311 for 26,500 bottles of shower supplies

$17,502 for 7,900 towels

$31,882 for 88,500 lbs. of laundry

$60,200 for 4,350

$30,150 for total VOH

$49,466 for FOH

Required:

You have been asked to re-evaluate Julies performance.

Prepare a report to Julies boss demonstrating and explaining your findings; including your suggestions for performance evaluation methods and measures in the future.

Please explain why the report was unfavorable.