A hotel budgets 6,400 rooms sold and housekeeping costs at $4.90/room. Actual sa

Question

A hotel budgets 6,400 rooms sold and housekeeping costs at $4.90/room. Actual sales were 6,250 rooms and actual costs were $4.40 per room. Compute the cost, volume and budget variances and indicate whether they are favorable or unfavorable. Volume Cost Variance Fav/Unfav? Cost Variance Volume Variance Budget Cost Actual Cost Variance Fav/Unfav? Cost Budget Variance A motel has 45 rooms, an occupancy rate of 76% and an average room rate of $58.00. Fixed costs are $480,000 and the variable cost per room sold is $8.00. What is the estimated annual sales revenue and operating income? Number of rooms Occupancy.rate Average room rate Days open per year Estimated revenue Fixed costs Variable cost/room sold Total variable costs Operating income An 80 seat coffee shop is open 365 days per year. What is the estimated annual sales revenue given the turnover and average check per meal data below? Seats Turnover Avg check Days open Annual revenue Breakfast 80 2.50 $7.80 365 Lunch 80 1.75 $8.75 365 Dinner 80 2.75 $11.25 365 Total projected revenue A restaurant has budgeted sales of $912,000. Variable costs are 72% of sales and fixed costs are $102,000. Calculate total variable costs, gross margin and operating income. Sales Variable cost rate Total variable costs Gross margin Fixed costs Operating income A hotel budgets 6,400 rooms sold and housekeeping costs at $4.90/room. Actual sales were 6,250 rooms and actual costs were $4.40 per room. Compute the cost, volume and budget variances and indicate whether they are favorable or unfavorable. Volume Cost Variance Fav/Unfav? Cost Variance Volume Variance Budget Cost Actual Cost Variance Fav/Unfav? Cost Budget Variance A motel has 45 rooms, an occupancy rate of 76% and an average room rate of $58.00. Fixed costs are $480,000 and the variable cost per room sold is $8.00. What is the estimated annual sales revenue and operating income? Number of rooms Occupancy.rate Average room rate Days open per year Estimated revenue Fixed costs Variable cost/room sold Total variable costs Operating income An 80 seat coffee shop is open 365 days per year. What is the estimated annual sales revenue given the turnover and average check per meal data below? Seats Turnover Avg check Days open Annual revenue Breakfast 80 2.50 $7.80 365 Lunch 80 1.75 $8.75 365 Dinner 80 2.75 $11.25 365 Total projected revenue A restaurant has budgeted sales of $912,000. Variable costs are 72% of sales and fixed costs are $102,000. Calculate total variable costs, gross margin and operating income. Sales Variable cost rate Total variable costs Gross margin Fixed costs Operating income

Explanation / Answer

Part 1 - Calculation of variances

Cost Variance = (Standard cost - Actual cost)*Actual rooms

=($4.9 - $4.4)*6250 = $3125 Favourable

Volume variance = (Standard Volume - Actual volume)*Standard cost

= (6400 - 6250)*$4.9 = $735 Favourable

Cost budget variance = (Standard Total cost - Actual total cost)

= (6400*$4.9) - (6250*$4.4) = $3860 Favourable

Part 2 - Calculation of operating Income and annual sales revenue

Part 3 - Calculation of annual Revenue

Annual Revenue =

Total Seats * Per seat Turnover * Average check * shop open days

Part 4 - Calculation of variable cost, gross margin & operating income

Cost Variance = (Standard cost - Actual cost)*Actual rooms

=($4.9 - $4.4)*6250 = $3125 Favourable

Volume variance = (Standard Volume - Actual volume)*Standard cost

= (6400 - 6250)*$4.9 = $735 Favourable

Cost budget variance = (Standard Total cost - Actual total cost)

= (6400*$4.9) - (6250*$4.4) = $3860 Favourable

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