You are required to:
	a) Prepare daily budgets for the current situation and for next year, showing the effect of no action.
	b) Prepare daily budgets showing the effect of the two alternative options.
	c) Calculate break-even points for each in sales volume and MYR
	d) Prepare a break-even chart for Option 1
	e) Comment briefly on which of the options should be adopted and discuss any other factors that you feel
	should be taken into consideration.
	f) Spreadsheet design

4 5 "X" Hotel 6 7 14,560 guests "X" Hotel offers hotel a total of 100 rooms to visiting guests with a total of The average hotel occupancy of the hotel is 40% 8 9 10 11 12 The current annual situation is as follows: 13 The hotel is open for 364 days a year 24 hours per day Average Spend Cost of Sales Wages Other Variable Costs Insurance is paid at 14 15 16 17 18 19 $ 60.00 $ 35.00 17% 8% $ 21,500 $ 35,000 $ 11,500 of Sales Sales Fixed costs per annum Utilities Equipment rental 20 The cost of sales is expected to rise by 5% at the start of next year. 21 22 23 24 25 26 A small hotel has recently opened nearby and appears to be reducing the level of business as they are a source of competition. The revenue managers must consider various alternative actions if they are to maintain their sales levels and achieve budgeted profits. The following options are considered: Activate Windows Option 2 Increase prices and customer spending by an averag $ 20% but would save, in variable costs, a total of $ 8.00, which would reduce the number of customers by 5,500 30 31 32 33 34 35 36 37 38 29 Option 3 Compete directly by applying to show an increase in customers by an estimated 15% 20% discounts across the board, which would expect Also, to give an additional variable costs of $ 5,200 Incremental for chart 1000 4 5 "X" Hotel 6 7 14,560 guests "X" Hotel offers hotel a total of 100 rooms to visiting guests with a total of The average hotel occupancy of the hotel is 40% 8 9 10 11 12 The current annual situation is as follows: 13 The hotel is open for 364 days a year 24 hours per day Average Spend Cost of Sales Wages Other Variable Costs Insurance is paid at 14 15 16 17 18 19 $ 60.00 $ 35.00 17% 8% $ 21,500 $ 35,000 $ 11,500 of Sales Sales Fixed costs per annum Utilities Equipment rental 20 The cost of sales is expected to rise by 5% at the start of next year. 21 22 23 24 25 26 A small hotel has recently opened nearby and appears to be reducing the level of business as they are a source of competition. The revenue managers must consider various alternative actions if they are to maintain their sales levels and achieve budgeted profits. The following options are considered: Activate Windows Option 2 Increase prices and customer spending by an averag $ 20% but would save, in variable costs, a total of $ 8.00, which would reduce the number of customers by 5,500 30 31 32 33 34 35 36 37 38 29 Option 3 Compete directly by applying to show an increase in customers by an estimated 15% 20% discounts across the board, which would expect Also, to give an additional variable costs of $ 5,200 Incremental for chart 1000