Session 8 Exercises copy.docx - Session 8 Exercises Problem 1 Kate the strategic planner at the Grand Hotel in Moscow is analyzing the monthly budget

Session 8 Exercises copy.docx - Session 8 Exercises Problem...

This preview shows page 1 - 3 out of 5 pages.

Session 8: Exercises Problem 1: Kate, the strategic planner at the Grand Hotel in Moscow, is analyzing the monthly budget verses actual numbers. Based on the hotel’s given criteria, she must determine if the budget variances are significant: - Revenue $5,000 and 4% - Fixed expenses $100 only - Variable expenses $500 and 2% Selected revenues and expenses for the past month are as follows: Budget Actual $ variance % variance S/NS Room sales $200,000 $196,000 -4,000 -2% NS Food sales 50,000 56,000 6,000 12% S Cost of food sold (V) 15,000 16,000 1,000 66.7% S Labor (F) 10,000 9,700 -300 -3% S Labor (V) 15,000 15,200 200 1.33% NS Supplies (V) 2,500 2,700 200 8% S Franchise fees (V) 4,000 4,480 480 12% S Depreciation (F) 6,000 6,000 0 0% NS Insurance (F) 2,000 2,050 50 2.5% NS Property taxes (F) 3,000 3,000 0 0% NS Required: 1) Complete the two variance columns above. 2) Identify each variance as either significant (S) or not significant (NS).
Image of page 1
Problem 2: Janice’s SPA has identified eight major categories of costs. The following table is the budget and actual data for March. She also estimated a cost formula for each cost. Janice’s SPA Planning Budget For the Month Ended March 31 Budget Flexible Buget 1,100 Actual Variance Flexible Variance Budgeted guest visits 1,000 1,100 1,100 100 0 Revenue ($180.00 pp) $180,000 $198,000 $194,200 14,200 -3,800 Expenses : Labor costs ($65,000 + $37.00 pp) 102,000 105,700 106,900 4,900 1,200 SPA supplies ($1.50 pp) 1,500 1,650 1,620 120 -30 Guest gratuities ($4.10 pp) 4,100 4,510 6,870 2,770 2,360 Electricity ($1,500 + $0.10 pp) 1,600 1,610 1,550 -50 -60 Rent ($28,500) 28,500 28,500 28,500 0 0 Liability insurance ($2,800) 2,800 2,800 2,800 0 0 Employee health insurance ($21,300) 21,300 21,300 22,600 1,300 1,300
Image of page 2
Image of page 3

You've reached the end of your free preview.

Want to read all 5 pages?

  • Spring '20
  • Self number, 496, Week-day names, Chef Ours

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes