Question

HomeSuites is a chain of all-suite, extended-stay hotel properties. The chain has 16 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 70 percent, based on a 365-day year. The average room rate was $204 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. Home Suites Operating Income Year 1 Sales revenue Lodging $125,092,800 Food & beverage 13,490,400 Miscellaneous 6,745, 200 Total revenues $145, 328,400 Costs Labor $ 40,931,200 Food & beverage 11,037,600 Miscellaneous 7,971,600 Management 2,512,000 Utilities, etc. 32,000,000 Depreciation 8,000,000 Marketing 25, 120,000 Other costs 8,012,000 Total costs $135,584,400 Operating profit $ 9,744,000 In year 1, the average fixed labor cost was $412,000 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 70 percent. Management has made the following additional assumptions for year 2.

Answer 1

Master - Excel Fite Home Insert Page Layout Formulas Data Review View Help Tell me what you want to do Calibri 11 VA A Share Xcut Copy * Format Painter General Paste -A- ab Wrap Text Merge Center - Audum - A Z Sort Find %> Insert Delete Format Chipboard Font Conditional Formatas Cell Formatting Table Styles Styles Alignment Number Cells A17 ✓ A B D E F 17 H 18 19 20 For Year 1 Activity Level = 16 Property * 105 Rooms * 365 Days = 613,200 Room Occupancy Nights For Year 2 Activity Level = 20 Property * 105 Rooms* 365 Days = 766,500 Room Occupancy Nights For Year 1 Number of Property = 16 For Year 2 Number of Property = 20 Fixed Part of Labour Costs = 412000 per Property Variable Part of Labour Costs = $ 3,43,39,200 21 22 23 24 25 26 Increment in Year 1 Costs Increment in Value Total Cost for Year 2 = C+D Percentage Particulars 27 28 Management 29 Marketing 30 Other Costs 8 25,12,000 2,51,20,000 80,12,000 2,00,960 25,12,000 10 27,12,960 2,76,32,000 80,12,000 31 1 Sheet 606 Sheet 607 Sheet 608 Sheet 609 Sheet 610 Working Sheets Sheet5 (2) + . 1405 Ready

Calibri 11 = ab Wrap Text 4 Share Paste B6 Copy - * Format Painter Α Α΄ a-A- General BIU- AutoSum- Merge & Center - WE o %, 000 Clipboard Insert Delete Format Full- Font Conditional Format as Cell Formatting Table Styles Styles Alignment Clear- Number Sort & Find & Filter - Select- Editing 11 Cells B C D E F G 1 H K 2. 3 4 Amount 5 6 7 8 Home Suites Operting Income Year 2 Particulars Sales Revenue Lodging Food and Beverages Miscellaneous Total Revenues Costs Labour Food and Beverages Miscellaneous Management Utilities 16,41,84,300 1,34,90,400 84,31,500 18,61,06,200 9 10 11 12 13 5,11,64,000 1,37,97,000 1,24,55,625 27,12,960 4,00,00,000 14 15 ܩܩܩܩܩܩܩ1 Sheet 606 Doncociatia Sheet 608 Sheet 609 Sheet 607 Working Sheet 611 Sheet 610 Ready 1509

Master - Excel File Home Insert Page Layout Formulas Sign in Data Review View Help Tell me what you want to do Calibri Share * Cut EB Copy Format Painter V11 VA A ab Wrap Text General Paste AutoSum- BIU- D-A- ES E 4 Merge & Center - - % ) 40.00 Fill - Insert Delete Format Clipboard Font Conditional Format as Cell Formatting Table Styles Styles Alignment Clear Number Sort & Find Filter Select- Editing Cells 122 .. x ✓ for B C F H 8 J K E Miscellaneous Total Revenues Costs 9 84,31,500 18,61,06,200 10 11 12 13 14 15 Labour Food and Beverages Miscellaneous Management Utilities Depreciation Marketing Other Costs Total Costs 5,11,64,000 1,37,97,000 1,24,55,625 27,12,960 4,00,00,000 1,00,00,000 2,76,32,000 80,12,000 16,57,73,585 16 17 18 19 20 21 Operaing Profit 2,03,32,615 22 Sheet 606 Sheet 607 Sheet 608 Sheet 609 Working Sheet 611 Sheet 610 150 Ready