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Service MTQ

The Cruyff Hotel has seen an increase in room occupancy but a decrease in overall profit. An accounting consultant was hired to implement a budgetary control system but became ill before completing it. You must now complete the consultant's work by: 1) Calculating room nights sold and costs per room night 2) Determining the actual operating profit margin 3) Calculating the budgeted contribution at 80% occupancy

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Fatima Zafar
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217 views

Service MTQ

The Cruyff Hotel has seen an increase in room occupancy but a decrease in overall profit. An accounting consultant was hired to implement a budgetary control system but became ill before completing it. You must now complete the consultant's work by: 1) Calculating room nights sold and costs per room night 2) Determining the actual operating profit margin 3) Calculating the budgeted contribution at 80% occupancy

Uploaded by

Fatima Zafar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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MTQ (Service Costing)

1 The Cruyff hotel provides accommodation and meals for tourists. There are two profit centres: accommodation
and
restaurant. Rooms are sold at a nightly rate per room and guests have the option of dining in the hotel restaurant
for
an extra charge. In the last year the number of rooms sold has increased but overall hotel profit has fallen. The
owners
of the hotel recently commissioned a consultant to introduce a system of budgetary control. Unfortunately the
consultant became ill part way through the project. As an Accounting Technician employed by the hotel, you have
been asked to complete the consultant’s work.
The following extracts from the consultant’s notes are available.
Cruyff Hotel: profit statement week 48
______Budget_____ Actual

Room Occupancy Level 80% 100% 95%


$ $ $
Accommodation sales 26,880 33,600 32,000
Restaurant sales 8,064 10,080 6,100
––––––– ––––––– –––––––
Total sales 34,944 43,680 38,100
Accommodation costs:
Laundry (1,344) (1,680) (1,603)
Cleaning (3,016) (3,520) (3,980)
Wages (3,000) (3,000) (2,950)
Restaurant costs:
Food (4,032) (5,040) (4,950)
Wages (2,000) (2,000) (2,050)
Common costs:
Building maintenance (2,000) (2000) (1,950)
Management salaries (1,500) (1,500) (1,500)
––––––– ––––––– –––––––
Operating profit 18,052 24,940 19,117
––––––– ––––––– –––––––

Notes
1. The hotel has 120 rooms. The rate per night is the same for all rooms. Occupancy level is expressed as a
percentage of full capacity.
2. The hotel and restaurant opens for 7 nights a week and for 52 weeks per year.
3. Budgeted restaurant sales are assumed to be a fixed percentage of accommodation sales.
4. Costs are either fixed or variable, except for cleaning, which is semi-variable

a) Calculate the number of room nights sold per week for

100% occupancy level ___________________

95% occupancy level ___________________

80% occupancy level ___________________

(A room night represents one room occupied for one night.) (3 marks)
b) Using the budgeted figures prepared by the management consultant as a basis, calculate

The variable cost per room-night for cleaning; (3 marks)

The fixed cost per week for cleaning; (1 mark)

c) Calculate the operating profit margin for the actual results in whole number % _____________ (1 mark)

d) Calculate the budgeted contribution for the 80% occupancy level. $____________________ (2 marks)

(10 marks)

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