Information on occupancy and costs at the New Light Hotel for April, May and Jun
ID: 2435234 • Letter: I
Question
Information on occupancy and costs at the New Light Hotel for April, May and June are as follows:April May June
Occupancy 1500 1650 1800
Day manager salary 4200 4200 4200
Night manager salary 3700 3700 3700
Cleaning Staff 15,300 15,600 15,900
Depreciation 12,000 12,000 12,000
Complimentary f&b 4600 5300 5800
Total $39,800 $40,800 $41,600
Required: Calculate the fixed costs per month and the variable cost per occupied room using account analysis for April. Calculate fixed costs per month and the variable cost per occupied room using the high-low method. Average room rates are $110 per night. What is the contribution margin per occupied room? In answering this, use the variable cost estimate determined above.
Explanation / Answer
Required: Calculate the fixed costs per month and the variable cost per occupied room using account analysis for April. Fixed Cost Day manager salary 4200 4200 4200 Night manager salary 3700 3700 3700 Depreciation 12,000 12,000 12,000 Cleaning Staff (Fixed) 12,300 12,300 12,300 Total Fixed cost 32,200 32,200 32,200 Variable cost Cleaning Staff (variable) 3,000 3,300 3,600 Complimentary f&b 4600 5300 5800 Total Variable cost 7,600 8,600 9,400 Variable cost per occupied room 5.06 5.21 5.22 Calculate fixed costs per month and the variable cost per occupied room using the high-low method. Occupancy Total cost High 1800 41,600 Low 1500 39,800 Difference 300 1,800 Variable cost per occupied room $6 Average room rates are $110 per night. What is the contribution margin per occupied room? Contribution margin = 110 – 6 = $104 In answering this, use the variable cost estimate determined above.