ABC hotel has 200 rooms and has a policy to determine its room rates based on consumers capacity to pay. For example busniess clients pay $1,200 per night and group tours $900 per night. The incremental cost of servicing a room is worked out at $110 per room. On average, most guest stay for three (3) nights. Rooms division manager is trying to establish if four (4) week advance reservation should be taken for a group booking of 40 rooms and three (3) nights of 7th , 8th and 9th June 2018. According to the reservation record, 80 rooms for the three (3) nights of 7th , 8th , and 9th , June 2018 are already booked by various business clients, and the historical trends of the past four (4) years suggest that 90% of the remaing 120 rooms would be sold to other busniess clients. Your are required to a) Prepare a detailed recommendation document explaining the important facts and figures to support if the group tour booking of 40 rooms for three (3) nights, of 7th , 8th and 9th June 2018 should be accepted or rejected while considering the revenue maximisation, effect of revpar, incremental and relevant cost in preparing the recommendation documents b) In the highly competitive environment, tourism and hospitality busniess can aspire to optimise revenue for the long term survival. Discuss various pricing strategies and their effect on tourism and hospitality businesses as a whole focus on the pricing strategy in tourism and hospitality business and highlight their strengths and weaknesses as reported in the published literature.

Sleep-EZ Suites Inc., operates a downtown hotel property that has 600 rooms. On average, 90% of Sleep-EZ Suites's rooms are occupied on weekdays, and 60% are occupied during the weekend. The manager has asked you to develop a direct labor budget for the housekeeping and restaurant staff for weekdays and weekends. You have determined that the housekeeping staff requires 40 minutes to clean each occupied room. The housekeeping staff is paid $10 per hour. The restaurant has 12 full-time staff (eight-hour day) on duty, regardless of occupancy. However, for every 20 occupied rooms, an additional person is brought in to work in the restaurant for the eight-hour day. The restaurant staff is paid $8 per hour.

Determine the estimated housekeeping, restaurant, and total direct labor cost for an average weekday and average weekend day. Enter percentages as whole numbers.

Plastics, Inc. and Joe's Canoe Shack both operate businesses located on the river. Plastics, Inc. dumps pollution into the river, which results in fewer canoe rentals for Joe. The marginal cost of cleaning up the pollution is $20,000 for Plastics, Inc. Joe estimates a reduction in pollution will lead to a marginal benefit of $13,000.

a. If Joe owns the rights to the river, which of the following is the most likely outcome?

Below is a set of projects aimed at cleaning up a city's recreational areas. Determine whether the city should undertake the cleanup effort. Assume the city has enough money in its budget to undertake all projects.

• Plastics will use its property rights to continue polluting.

• Plastics will pay Joe $17000 to pollute.

• Joe will pay Plastics $17000 not to pollute.

• Joe will enforce his property rights and not allow Plastics to pollute.

b. If Plastics, Inc. owns the rights to the river, which of the following is the most likely outcome?

• Joe will enforce his property rights and not allow Plastics to pollute.

• Joe will pay Plastics $17000 not to pollute.

• Plastics will use its property rights to continue polluting.

• Plastics will pay Joe $17000 to pollute.

Job Costs Using a Plantwide Overhead Rate

Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $225,000, and budgeted direct labor hours were 18,000. The average wage rate for direct labor is expected to be $25 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow:

Job 39 Job 40 Job 41 Job 42
Beginning balance $24,800 $32,500 $15,400 $1,600
Materials requisitioned 20,400 23,200 10,400 13,400
Direct labor cost 11,500 20,300 5,050 4,300

Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 125 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.

Required:

1. Calculate the balance in Work in Process as of June 30.

$

2. Calculate the balance in Finished Goods as of June 30.

$

3. Calculate the cost of goods sold for June.

$

4. Calculate the price charged for Job 39. Round your answer to the nearest cent.

$

5. What if the customer for Job 40 was able to pay for the job by June 30? What would happen to the balance in Finished Goods?

What would happen to the balance of Cost of Goods Sold?

Job Costs Using a Plantwide Overhead Rate

Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $455,000, and budgeted direct labor hours were 26,000. The average wage rate for direct labor is expected to be $35 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow:

Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 125 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.

Required:

1. Calculate the balance in Work in Process as of June 30.

$

2. Calculate the balance in Finished Goods as of June 30.

$

3. Calculate the cost of goods sold for June.

$

4. Calculate the price charged for Job 39. Round your answer to the nearest cent.

$

5. What if the customer for Job 40 was able to pay for the job by June 30? What would happen to the balance in Finished Goods?

What would happen to the balance of Cost of Goods Sold?

Job Costs Using a Plantwide Overhead Rate

Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $270,000, and budgeted direct labor hours were 27,000. The average wage rate for direct labor is expected to be $20 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow:

Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 115 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.

Required:

1. Calculate the balance in Work in Process as of June 30.

$

2. Calculate the balance in Finished Goods as of June 30.

$

3. Calculate the cost of goods sold for June.

$

4. Calculate the price charged for Job 39. Round your answer to the nearest cent.

$

5. What if the customer for Job 40 was able to pay for the job by June 30? What would happen to the balance in Finished Goods?

What would happen to the balance of Cost of Goods Sold?

Job Costs Using a Plantwide Overhead Rate

Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $187,500, and budgeted direct labor hours were 15,000. The average wage rate for direct labor is expected to be $25 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow:

Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 125 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.

Required:

1. Calculate the balance in Work in Process as of June 30.

$

2. Calculate the balance in Finished Goods as of June 30.

$

3. Calculate the cost of goods sold for June.

$

4. Calculate the price charged for Job 39. Round your answer to the nearest cent.

$

5. What if the customer for Job 40 was able to pay for the job by June 30? What would happen to the balance in Finished Goods?

What would happen to the balance of Cost of Goods Sold?

(Weighted average cost of capital​)

ABBC Inc. operates a very successful chain of yogurt and coffee shops spread across the southwestern part of the United States and needs to raise funds for its planned expansion into the Northwest. The​ firm's balance sheet at the close of 2015 appeared as​ follows:

.At​ present, the​ firm's common stock is selling for a price equal to 3 times its book​ value, and the​ firm's investors require a return of

18 percent. The​ firm's bonds command a yield to maturity of 7 ​percent, and the firm faces a tax rate of 37 percent. At the end of the previous​ year, ABBC's bonds were trading near their par value.

a. What does​ ABBC's capital structure look​ like?

b. What is​ ABBC's weighted average cost of​ capital?

c. If​ ABBC's stock price were to rise such that it sold at 3.5 times its book value and the cost of equity fell to

15 ​percent, what would the​ firm's weighted average cost of capital be​ (assuming the cost of debt and tax rate do not​ change)?

I NEED ANSWERS TO THESE QUESTIONS:

a. What is the proportion of debt financing in​ ABBC's capital​ structure? ______​% ​(Round to two decimal​ places.)

What is the proportion of equity financing in​ ABBC's capital​ structure? ​______% ​(Round to two decimal​ places.)

b. What is​ ABBC's weighted average cost of​ capital? ______​% ​(Round to two decimal​ places.)

c. If​ ABBC's stock price were to rise such that it sold at 3.5 times its book value and the cost of equity fell to 15

​percent, what would the​ firm's weighted average cost of capital be​ (assuming the cost of debt and tax rate do not​ change)?

_____​% ​(Round to two decimal​ places.)

Job Costs Using a Plantwide Overhead Rate Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $280,000, and budgeted direct labor hours were 16,000. The average wage rate for direct labor is expected to be $35 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Job 39 Job 40 Job 41 Job 42 Beginning balance $22,400 $35,100 $17,100 $1,900 Materials requisitioned 19,200 21,800 12,700 12,100 Direct labor cost 10,300 18,900 7,350 3,000 Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 110 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.

Required:

1. Calculate the overhead rate based on direct labor cost.

% of direct labor cost

2. Set up a simple job-order cost sheet for all jobs in process during June.

Naranjo Company Job-Order Cost Sheets

Job 39 Job 40 Job 41 Job 42

Balance, June 1 $ $    $ $

Direct materials    $    $ $ $

Direct Labor $    $    $ $

Total $    $ $    $

3. What if the expected direct labor rate at the beginning of the year was $28 instead of $35? What would the overhead rate be? If required, round your overhead rate answer to one decimal place.

New budgeted direct labor cost = $

New overhead rate = % of direct labor cost

            The Fukushima Power plant is planning construction of a new plant to generate electricity four years hence and must decide now between a small, medium, or large-sized plant. The exact size needed is uncertain because future demands can only be estimated. Forecasters have estimated future demands and their likelihoods as follows:

In the following, all the future costs and earnings have been adjusted to their present worth:

1. If a large plant is built and demand is high, the plant’s net present value (NPV) is estimated to be $180 million. If the demand is medium, however, the NPV of a large plant will drop to $100 million. If the demand is low the NPV will be loss of $200 million.
2. A medium sized plant will have an NPV of $120 million if demand is high or medium and a loss of $5 million if demand is low. If demand is high, a medium-sized plant can be enlarged at a cost of $40 million to generate an additional $80 million in earnings.
3. The capacity of a small plant would limit its NPV to $60 million regardless of demand. If demand is medium, a small plant can be enlarged a moderate amount at a cost of $20 million. Its NPV would then be $110 million less the cost of $20 million for the expansion. If demand is high, a small plant can be enlarged greatly in size at a cost of $80 million. Its NPV would then be $170 million less the cost of $80 million for the expansion. On the contrary, if demand is high, a small plant can be enlarged a moderate amount to increase its NPV to $140 million less the cost of $40 million for the expansion

Conduct a decision-tree analysis on Excel to determine the size of the power-generating plant the company should build now. What size of the power-generating plant the company should build now? Briefly discuss your answer.