The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $44. The a la carte option has a budgeted average price of $33 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $24 and the a la carte option averages $19 per meal in budgeted variable cost. The manager estimates that 2,600 people will order a meal in any month.

For July, the restaurant served a total of 2,400 meals, including 940 buffet options. Total revenues were $42,300 for buffet meals and $52,560 for the a la carte meals.

Required:

a. Compute the activity variance for the restaurant for July.

b. Compute the mix and quantity variances for July.

The Ivanhoe Hotel opened for business on May 1, 2022. Here is its trial balance before adjustment on May 31.

Other data:

A. Prepare a ledger using T-accounts. Enter the trial balance amounts and post the adjusting entries. (Post entries in the order of journal entries presented in the previous question.)

B. Prepare an income statement for the month of May.

C. Prepare a retained earnings statement for the month of May.

D. Prepare a classified balance sheet at May 31. (List current assets in order of liquidity. List Property, Plant and Equipment in order of Land, Buildings and Equipment .)

E. Identify which accounts should be closed on May 31.

Britton Carter is interested in building a new hotel in Queenstown, New Zealand. His company estimates that the hotel would require an initial investment of $20 million, would produce a positive cash flow of $6.5 million a year and at the end of each of the next 15 years can be salvaged (after tax) $10 million at t=15. The company recognizes that the cash flow could in fact be much higher or lower depending on whether that area becomes a popular tourist area. It is believed that at the end of two years, a 15% chance exists in the tourism will not be spreading in that direction and yearly cash flow will be only $2.5 million for 15 years within after-tax salvage value of $7 million and 85% chance exists that tourism will be heading that way in the yearly cash flow will be $8.5 million for 15 years with an after-tax salvage value of $18 million. If the firm waits two years, the initial investment will be $25 million. The project's cost of capital is 12%. Should the firm proceed with the project today or should it wait two years before deciding? (Round NPVS to the nearest dollar) choose the closest answer

A. wait two years, the NPV of building today is $2,745,595 worst in the NPV for waiting two years.

B. Build it now since the NPV of building today is $2,38,340 better than the NPV for waiting two years

C. Wait two years the NPV of building today is $3,652,072 worst in the NPV for waiting two years

D. Build it now since the NPV of building today is $4122163 better than the NPV of waiting two years

E. Build it now since the NPV a building today is $1,580,882 better than the MPV for waiting two years

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.

HomeSuites is a chain of all-suite, extended-stay hotel properties. The chain has 15 properties with an average of 200 rooms in each property. In year 1, the occupancy rate (the number of rooms filled divided by the number of rooms available) was 60 percent, based on a 365-day year. The average room rate was $205 for a night. The basic unit of operation is the “night,” which is one room occupied for one night.

The operating income for year 1 is as follows:

In year 1, the average fixed labor cost was $411,000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs (management, marketing, and other costs) are fixed for the firm.

At the beginning of year 2, HomeSuites will open three new properties with no change in the average number of rooms per property. The occupancy rate is expected to remain at 60 percent. Management has made the following additional assumptions for year 2:

The average room rate will increase by 10 percent.

Food and beverage revenues per night are expected to decline by 25 percent with no change in the cost.

The labor cost (both the fixed per property and variable portion) is not expected to change.

The miscellaneous cost for the room is expected to increase by 30 percent, with no change in the miscellaneous revenues per room.

Utilities and depreciation costs (per property) are forecast to remain unchanged.

Management costs will increase by 5 percent, and marketing costs will increase by 5 percent.

Other costs are not expected to change.

The managers of HomeSuites are considering different pricing strategies for year 2. Under the first strategy (“High Price”), they will work to maintain an average price of $232 per night. They realize that this will reduce demand and estimate that the occupancy rate will fall to 50.0 percent with this strategy. Under the alternative strategy (“High Occupancy”), they will work to increase the occupancy rate by lowering the average price. They estimate that with an average nightly rate of $192, they can achieve an occupancy rate of 70 percent. The current estimated profit is $21,069,150.

Required:

a. Prepare a budgeted income statement for year 2 if the “High Price” strategy is adopted. (Round your per unit average cost calculations to 2 decimal places.)

b. Prepare a budgeted income statement for year 2 if the “High Occupancy” strategy is adopted. (Round your per unit average cost calculations to 2 decimal places.)

c. Which is the correct pricing strategy for year 2.

HomeSuites is a chain of all-suite, extended-stay hotel properties. The chain has 20 properties with an average of 150 rooms in each property. In year 1, the occupancy rate (the number of rooms filled divided by the number of rooms available) was 75 percent, based on a 365-day year. The average room rate was $220 for a night. The basic unit of operation is the “night,” which is one room occupied for one night.

The operating income for year 1 is as follows:

In year 1, the average fixed labor cost was $407,000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs (management, marketing, and other costs) are fixed for the firm.

At the beginning of year 2, HomeSuites will open four new properties with no change in the average number of rooms per property. The occupancy rate is expected to remain at 75 percent. Management has made the following additional assumptions for year 2:

The average room rate will increase by 8 percent.

Food and beverage revenues per night are expected to decline by 15 percent with no change in the cost.

The labor cost (both the fixed per property and variable portion) is not expected to change.

The miscellaneous cost for the room is expected to increase by 20 percent, with no change in the miscellaneous revenues per room.

Utilities and depreciation costs (per property) are forecast to remain unchanged.

Management costs will increase by 6 percent, and marketing costs will increase by 8 percent.

Other costs are not expected to change.

Required:

Prepare a budgeted income statement for year 2. (Round your per unit average cost calculations to 2 decimal places.)

HomeSuites is a chain of all-suite, extended-stay hotel properties. The chain has 12 properties with an average of 200 rooms in each property. In year 1, the occupancy rate (the number of rooms filled divided by the number of rooms available) was 75 percent, based on a 365-day year. The average room rate was $175 for a night. The basic unit of operation is the “night,” which is one room occupied for one night.

The operating income for year 1 is as follows:

In year 1, the average fixed labor cost was $401,000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs (management, marketing, and other costs) are fixed for the firm.

At the beginning of year 2, HomeSuites will open four new properties with no change in the average number of rooms per property. The occupancy rate is expected to remain at 75 percent. Management has made the following additional assumptions for year 2:

• The average room rate will increase by 8 percent.
• Food and beverage revenues per night are expected to decline by 15 percent with no change in the cost.
• The labor cost (both the fixed per property and variable portion) is not expected to change.
• The miscellaneous cost for the room is expected to increase by 20 percent, with no change in the miscellaneous revenues per room.
• Utilities and depreciation costs (per property) are forecast to remain unchanged.
• Management costs will increase by 6 percent, and marketing costs will increase by 8 percent.
• Other costs are not expected to change.

The managers of HomeSuites are considering different pricing strategies for year 2. Under the first strategy (“High Price”), they will work to maintain an average price of $212 per night. They realize that this will reduce demand and estimate that the occupancy rate will fall to 65.0 percent with this strategy. Under the alternative strategy (“High Occupancy”), they will work to increase the occupancy rate by lowering the average price. They estimate that with an average nightly rate of $172, they can achieve an occupancy rate of 85 percent. The current estimated profit is $16,159,340.

Required:

a. Prepare a budgeted income statement for year 2 if the “High Price” strategy is adopted. (Round your per unit average cost calculations to 2 decimal places.)

A researcher wished to compare the average daily hotel room rates between San Francisco and Los Angeles. The researcher obtained an SRS of 15 hotels in downtown San Francisco and found the sample mean ? ̅1=$156, with a standard deviation ?_1= $15. The researcher also obtained an independent SRS of 10 hotels in downtown Los Angeles and found the sample mean ? ̅_2= $143, with a standard deviation ?_2= $10. Let 1 and 2 represent the mean cost of the populations of all hotels in these cities, respectively. Assume the two-sample t procedures are safe to use, i.e. Unequal Variances. a)Suppose the researcher had wished to test the hypotheses H0: µ1 = µ2 vs. Ha: µ1 ≠ µ2 at the 5% significance level (i.e., α = 0.05). The numerical value of the two-sample t statistic is? b)What is your P-value? c)What are your statistical conclusion and its interpretation? Use significance level, α = 0.05 (or 5%

. d)Based on your P-value and conclusion in (b) and (c), will you conclude that a 99% confidence interval for µ1 - µ2 includes the value 0? Explain.

P6.10 The Resolute Resort hotel currently operates at 75% occupancy, using a rack rate for all rooms of $60 and a marginal cost per room sold of $ 8 . calculate the occupancy figures for discount grid using discount percentages of 5%,15%,and 20%

P6.11 Motley Motel's potential average room rate is calculated to be $62.Assume that this motel had three market segments.Vacation travelers use 75% of the room nights and are charged 100% of the rack rate. business travelers use 15% of the room nights and are charged 90% of the rack rate.sport teams acounts for 10% of the room nights and are charged 80% of the rack rate.

a. calculate the room rate by market segment.

2. Prove that your calculations are correct,assuming that total annual room nights are 7,300.

'Break even analysis

You own a 10 bedroom hotel

With the following prices:

$ 12,000 per month mortgage payment

   $ 4,000 per month for the gardener and housekeeper

   $   9.00 per room for soap, towels etc.

   $ 20.00 per room desired Net Profit

Assume a 30 day month

SOLVE FOR THE FOLLOWING:

1.   The selling price per room per night AND the monthly breakeven point.

2.   The monthly breakeven point if you raise the selling price calculated in question 1

       above by $12.00.

3. The monthly breakeven point if you lower the selling price calculated in question 1   

      above by $3.00.

4. Which of the 3 prices would you charge? What factors should you consider?

5. What would your selling price and breakeven point be if you want to pay

      yourself $50,000 per year?