Hotel Budget Problems Exercise 2

Hotel Budget Problems Exercise 2

Prepare the annual operating expense budget for the next year using the formulas from Problem 1 and the following assumptions. Remember there are 13 accounting periods in a fiscal year, each with four weeks and 28 days.

Room Revenue $19,184,000
Transient Rooms Sold 184,000
Group Rooms Sold 4,000
Total Rooms Sold 218,000

Operating Expense Annual Budget
Linen
Cleaning Supplies
Guest Supplies
Laundry
Concierge Expense
Office Supplies
Reservation Expense
Reservation Department Cost
Fixed Reservation Center Cost
Variable Reservation Center Cost
Total Reservation Expense
All Other Expense
Total Operating Expenses in Dollars
Total Operating Expenses as a Percentage

Answers Problem 2

Prepare the annual operating expense budget for the next year using the formulas from problem 2 and the following assumptions. Remember there are 13 accounting periods in a fiscal year, each with four weeks and 28 days.

Room Revenue $19,184,000
Transient Rooms Sold 184,000
Group Rooms Sold 34,000
Total Rooms Sold 218,000

Operating Expense Annual Budget

Linen $5,183 * 13 Periods = $ 67,379
Cleaning Supplies .24 Cents * 218,000 = $ 52,320

Rooms Sold
Guest Supplies $1.05 *218,000 = $228,900
Laundry $250,000 * 70% = $175,000

Annual Laundry Department Budget = $250,000
Concierge Expense .69% * $19,184,000 = $132,370
Office Supplies .22% * $19,184,000 = $42,211

Reservation Expense
Reservation Department Cost $25,000 * 13 Periods = $325,000
Fixed Reservation Center Cost 600 Rooms * 13 Periods *$50 = $390,000
Variable Reservation Center Cost 184,000 * 50% * $6 = $552,000
Total Reservation Expense = $1,267,000
All Other Expense $20,000 * 13 periods= $ 260,000
Total Operating Expenses in Dollars = $2,225,180
Total Operating Expense as a Percentage = 11.6%

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