The Sunflower Suites Hotel accepts guests 365 days per year. The managerbudgeted to sell 5,913 roomsfor total
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Question:
The Sunflower Suites Hotel accepts guests 365 days per year. The managerbudgeted to sell 5,913 roomsfor total revenue of $709,560. Housekeeping costs were budgeted at $8 per room. The only other budgeted costs were utilities at $30,000, rent at $60,000 and fixed front desk salaries of $70,000.
Actual results for 2021 were as follows.
Rooms Sold | 6,242 |
Revenue | $761,463 |
Housekeeping Wages Expense | 51,180 |
Utilities Expense | 32,000 |
Rent Expense | 60,000 |
Front Desk Salaries Expense | 72,000 |
DepartmentOperating Profit | $546,283 |
required
- Prepare a flexible budgetanalysis for the rooms department for the year.
sunflower suites rooms department | ||||||||
Flexible budget analysis | ||||||||
For the year ended december 31, 2021 | ||||||||
actual results | Flexible budget Variance | Flexible budget | sales Volume Variance | static budget | Price/ Variable cost per guest | |||
- Briefly describe the resultsand point out a few items you are concernedabout.
- Calculate the price and quantity variancesfor revenue and cost variancesfor housekeeping labour and explainthe results to Shannon.
- Explain to Shannon where you will focus your time first and why.
Related Book For
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
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