As a manager you have been asked by your employer, BestTime Hotels, to determine the overhead rate applicable to each night’s accommodation in one of the hotel’s rooms. The hotel has 150 rooms and achieves an 80% occupancy rate on average over the 365 days of the year. You have determined the overhead costs that cannot be charged direct to each room are as follows:

Depreciation Gardening and pool maintenance Insurance Maintenance Rates Electricity Sundry expenses Indirect salaries

$190 600 212 400 220 400 246 800 57 200 96 600 156 000 528 000

Required

A. Calculate the overhead rate applicable to each room night for the hotel.

B. What are some of the direct labour and direct expenses that are likely to be applicable to a hotel room that will also need to be included in pricing the room rate?