There are two budget problems to complete. The first is to calculate amounts to use in budgeting based on actual information and formulas. The second is to prepare an annual budget based on that information. Following is information for the Rooms Department for the Flagstaff Hotel for the first six periods of the year:

Required

Use the following formulas to calculate each one of the line items: They will be used to prepare the annual budget for next year. Round the average cost per period to whole dollars, round the cost per occupied room to whole cents, round the cost per occupied room to whole cents, and round the percentage of sales to four decimals. Use the laundry and reservation information as supplied.

1. Linen - Calculate the average cost per period.

2. Cleaning Supplies – Calculate the average cost per occupied room.

3. Guest Supplies – Calculate the average cost per occupied room.

4. Outside Services – Calculate the average cost per period.

5. Laundry – Calculate at 70% of total laundry department expense per period. Laundry department expense at $115,000 for six periods.

6. Concierge Level Expense – Calculate as a percentage of total room sales.

7. Office Supplies – Calculate as a percentage of total room sales.

8. Reservation Cost.

a. Reservation Department average cost per period.

b. Fixed expense at $50 per total number of rooms in hotel per period.

c. Variable expense at $6 per reservation. Calculate the reservations As 50% of Transient Rooms Sold.

9. All other expense at $20,000 per period.

$ 8,713,000 Room Revenue Transient Rooms Sold 83,730 Group Rooms Sold Total Rooms Sold 16,270 100,000 Operating Expenses $ 31,100 Linen Cleaning Supplies Guest Supplies 24,000 104,800 Outside Services 24,000 Laundry Concierge Expense Office Supplies Reservation Expense Reservation Department 80,500 60,000 19,200 $ 150,000 Fixed Res Center Cost 180,000 Variable Res Center Cost At $6 per transient reservation Total Reservation Expense 251,200 581,200 All Other Expense 120,000 Total Operating Expenses $ 1,044,800 Total Operating Expense Percentage 12.0%