ACC3025 Hospitality Finance

1. Compute the projected revenue level for July using a four-month moving average and the following sales data

January ​$180,000
February​$220,000
March​$230,000
April​$200,000
May​$250,000
June​$280,000


2. A motel has an occupancy rate of 75%, with 260 rooms available per day. At an ARR of $68; forecast room revenue for the month using 30 days.

3. Compute the variable cost per unit and the fixed cost per month for the semi-variable expense based on the information provided using the high-low method

Month​Volume​Labor Cost​
1​1500​$280
2​1280​$220
3​2500​$380
4​1750​$310
5​1250​$230

4. If menu prices increase by 5% next year and volume increases by 8% beginning January 1st, forecast sales for the first 6 months

Month​Sales​Price Increase​Volume increase = Budget
January​35,000
February​38,000
March​44,500
April​32,500
May​48,000
June​46,000

5. Use the weighted average to compute the average room rate from the following information:
Rooms​Rate
​Single​45​$65.00
​Double​55​$85.00
​Suite​15​$125.00


6. Use the following information

Sales = $537,000
Average Guest Check = $18.75
Food Cost Percent = 35.0%
IBIT = $150,000

Calculate Break-even point


7. Complete the in/off season analysis for the following information

Last Year​In-Season​Off-Season​If Closed
​(12 months)​(9 months)​(3 months)​off-season

Sales​$400,000​$300,000
VC​$300,000
CM​$100,000
FC​$ 60,000
IBIT​$ 40,000



8. Use the CVP analysis method to calculate sales revenue required to achieve an IBIT of $75,000 with the following forecast data: Sales Forecast = $373,000
Variable costs = $167,000
Fixed costs = $103,000

Determine sales required to achieve an IBIT objective of $75,000


9. Calculate the payback period for the following project. Use straight-line depreciation.
Purchase of equipment​$100,000
Annual Savings​$30,000
Depreciable life of asset​5 years
Salvage value​0

10. Use the following information to determine the cause of sales variances: (10 points)
Budget​Actual​Variance
Room Sales​463,500​516,750

Information from managers budget working papers
Rooms:​4,500
Average room rate:​$103.00
Current months statistics from the accounting department
Rooms:​5,300
Average room rate:​$97.50



11. Provide a series of flexible budgets giving Sales, Variable Costs, Fixed Costs and Net Income for the year for estimated sales levels of 1000, 1500, and 2000 units; using fixed costs of $3,000 and variable costs per unit of $3.00 assuming a sales price per unit of $5.25

Unit Sales​ ​1000​1500​2000

Sales Dollars

Variable Costs

Fixed Cost
_________________________________________________________________
IBIT


12. Calculate the first month's ending cash balance for the following:
Beginning cash balance of $15,000
$200,000 Sales, with 40% paid in cash. Half of the sales on account is paid equally in the month of sale and the next month.
Expenses were $120,000 all on credit. 20% paid in the month of purchase and the balance paid the second month.