You are Manager of Special Events at a large hotel in Great Neck. The meeting rooms and ballroom take up one floor of the 12-story building. The other managers at the hotel have responsibilities for Accommodations, Restaurant, and Guest Facilities (pool, fitness club, business center, tennis courts, parking garages, etc.). Each manager, except Guest Facilities, is evaluated on how profitable his/her area of operation was during the period. The Guest Facilities manager is evaluated on the basis of cost control because no fees are charged for many of the services under her control.
Required:
(a) How will you determine what costs incurred at the hotel are controllable or non controllable? Be sure to discuss the selection of a cost object.
(b) One month you notice that the Restaurant Manager had decided to charge you ‘‘fees’’ for the following items: laundering linens used in special events, over time premiums for the cooking and waitstafff or special events, and hourly wages of room service per sonnel who helped out during special events (when not delivering room service items). The Accommodations Manager had decided to charge you ‘‘fees’’ for one twelfth of the property taxes, electricity, and building depreciation. The Guest Facilities manager had decided to charge you a ‘‘fee’’ per parking space for every person expected at all special events held during the month. Write a memo to the company president discussing these fees and how they could affect your performance evaluation.