Weight: 15% Assignment 1 - FNCE - 350

Marks: Written Questions / 22, Calculation questions /78 Group Project (4-5 people)

Creating aRevenue Budget

In your assigned group, complete the following project using the resources provided and guidelines below.Each team will submit one final submission on behalf of all members containing one WORD document for the written questions, and the provided Excel template.

Please refer to the course schedule in Brightspace for current due dates.

The Scenario

The Elbow Bend Hotel:

The Elbow Bend Hotel is located in Calgary's East Village and has 100 Rooms total. The breakdown of room types is as follows:

40 Deluxe Rooms ($)

50 Executive Rooms ($$)

10 Suites ($$$)

The Hotel Restaurant:

The hotel has one casual-dining restaurant that is open for dinner daily from 5:00pm-9:00pm. It has 80 seats and is open year-round to support the hotel guests. The best-selling entre in the restaurant is the Chef Signature Chicken. It accounts for 30% of all food menu items sold, while the best-selling beverage is the East Village Caesar which accounts for 10% of all beverage menu items sold.

The restaurant can turn twice in one service period. This outlet requires one server and two culinary staff for every 20 guests (seats). All server shifts are 6 hours long (Start one hour before opening at 5pm and end one hour after closing at 10pm). All culinary shifts are 8 hours long.

Instructions

Working with your assigned group, use the following figure and the description above to answer the Assignment 1 questions. (You will also be provided with an excel template with the same information to support your work).

Figure 1.

Calculation Questions(Excel Sheet)

1. Use the excel workbook provided in Brightspace to create a Revenue Budget for the entire year with quarterly totals (16 marks)
2. Calculate the number of rooms sold per night, in each room category, by quarter. (16 marks)
   1. The Suites are always 100% sold out every month.
   2. The other two room types split equally (Deluxe 50% and Executive 50% of room sales) for the remainder of rooms sold.
   3. Hint: Be aware of how many days in each month there are!
3. Calculate RevPAR by quarter. (4 marks)
4. Calculate the average of how many guestsare served in the restaurant each month. (12 marks)
5. What is the maximum number of guests that could be served in the restaurant in one day? (1 marks)
6. Calculate how many more guests the restaurant could have serviced per month. (12 marks)
7. Calculate the Average Sales Revenue per server, per quarter. (4 marks)
8. Calculate the percentage of your total operating revenue that accounts for Rooms, Food, and Beverage. (3 marks)
9. Calculate the average food and beverage check. (1 marks)
10. Calculate how many guests order the Chef Signature Chicken each quarter. (4 marks)
11. Calculate how many guests order the East Village Caesar each quarter. (4 marks)
12. If all restaurant guests are guests of the hotel, what percentage of hotel guests were captured by the hotel restaurant? (Calculate the percentage of hotel guests that use the restaurant). (1 mark).

Written Questions(WORD Document)

1. Briefly describe what a Revenue Budget is and what information is contains. (1 mark, Maximum 100 words).
2. Explain why budgeting is a planning and control system for a business? (maximum 150 words, 2 marks).
3. Describe the difference between a Static Budget and a Flexible Budget. Describe a situation where it would make sense to use a Static Budget. Describe another situation where it would make sense to use a Flexible Budget. (Maximum 300 words, 6 marks).
4. Based on your findings from the calculation questions, create one recommendation for the Elbow Bend Hotel that would help to increase restaurant traffic (increase # of guests), or increase the average guest check. (Maximum 200 words, 4 marks).
5. Describe the differences between Top-down and Bottom-up budgeting. Describe one strength and one weakness of each. (Maximum 300 words, 6 marks).
6. Describe 3 signs of a weak budget (3 marks, Maximum 200 words).