Please create an annual income statement in the gross margin format for Lindsay's Legacy Cottages, a...
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Please create an annual income statement in the gross margin format for Lindsay's Legacy Cottages, a 25-cottage bed and breakfast mini resort located at the Benziger Family Winery. The B&B operates year round, and they are open 365 days per year. Each room has two people staying in the room. There are 5 total sources of revenue and 5 sources of cost of goods sold. The property's rack rate is $300 with a yield of 80%. Their annual occupancy rate is 82%, and the cost of sales for room revenue is 5% of room revenue. Information on the various sources of additional revenues is as follows: Food and beverage revenue is calculated using $12 per person avg. guest check for food and $8 per person for beverages based on 2 people per room each occupied room night. (Hint: determine the total number of annual occupied room nights and multiply that by 2 to get the total number of people dining for the year). Cost of sales for food is 40% and for beverages it is 20%. Wine tasting tours bring in 25% of room revenue (on top of the room revenues - add it as its own source of revenue) with a 10% cost of sales. Retail wine by the bottle drives another $200,000 annually (on top of room revenue and on top of wine tasting - add it as another revenue source) with a 20% cost of sales. Other expenses are salaries at $450,000 and wages at $250,000 per year plus marketing (10% of total sales) and depreciation ($900,000 per year) and other administrative costs running $75,000 per year. Create your income statement with a revenue section, cost of goods sold section, and expenses section. Remember to include a gross margin sub total. Conclude with a line for operating income. After you create the income statement, answer these questions: a) What is ADR b) What is the overall cost of goods sold (all cgs combined divided by all sales combined) in terms of a percentage? c) What is the gross margin percentage? d) If occupancy declined to 70%, what would be the decline in annual room revenues? e) What is the operating income percentage? Please create an annual income statement in the gross margin format for Lindsay's Legacy Cottages, a 25-cottage bed and breakfast mini resort located at the Benziger Family Winery. The B&B operates year round, and they are open 365 days per year. Each room has two people staying in the room. There are 5 total sources of revenue and 5 sources of cost of goods sold. The property's rack rate is $300 with a yield of 80%. Their annual occupancy rate is 82%, and the cost of sales for room revenue is 5% of room revenue. Information on the various sources of additional revenues is as follows: Food and beverage revenue is calculated using $12 per person avg. guest check for food and $8 per person for beverages based on 2 people per room each occupied room night. (Hint: determine the total number of annual occupied room nights and multiply that by 2 to get the total number of people dining for the year). Cost of sales for food is 40% and for beverages it is 20%. Wine tasting tours bring in 25% of room revenue (on top of the room revenues - add it as its own source of revenue) with a 10% cost of sales. Retail wine by the bottle drives another $200,000 annually (on top of room revenue and on top of wine tasting - add it as another revenue source) with a 20% cost of sales. Other expenses are salaries at $450,000 and wages at $250,000 per year plus marketing (10% of total sales) and depreciation ($900,000 per year) and other administrative costs running $75,000 per year. Create your income statement with a revenue section, cost of goods sold section, and expenses section. Remember to include a gross margin sub total. Conclude with a line for operating income. After you create the income statement, answer these questions: a) What is ADR b) What is the overall cost of goods sold (all cgs combined divided by all sales combined) in terms of a percentage? c) What is the gross margin percentage? d) If occupancy declined to 70%, what would be the decline in annual room revenues? e) What is the operating income percentage?
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Answer rating: 100% (QA)
First we will create the income statement based on the information provided and then proceed to answer the questions 1 Annual room revenues The property has a rack rate of 300 and an occupancy rate of ... View the full answer
Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
Posted Date:
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