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Question 3 The costs of a hotel at two different sales levels are as follows: Monthly Room Sales 2,000 3,000 Payroll: Salaries $15,000 $15,000 Wages
Question 3
The costs of a hotel at two different sales levels are as follows:
Monthly Room Sales | ||
2,000 | 3,000 | |
Payroll: Salaries | $15,000 | $15,000 |
Wages | 40,000 | 60,000 |
Employee benefits | 9,200 | 10,700 |
Supplies | 2,000 | 3,000 |
Utilities | 8,000 | 8,000 |
Other operating costs | 4,000 | 5,000 |
Building rent | 8,000 | 8,000 |
Interest expense | 2,000 | 2,000 |
Insurance | 3,000 | 3,000 |
- Identify each cost as fixed, variable or mixed.
- Calculate the estimated monthly fixed costs (including the fixed portion of mixed costs).
- Calculate the estimated variable costs per room sold.
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