Question: A motel had budgeted an occupancy of 8,000 rooms with a selling price of $82 per room and a variable housekeeping cost of $4.40 per room. Actual data indicated that a total of 8,480 rooms were sold at an average selling price of $77 per room and the actual cost of housekeeping per room was $4.90 per room. Answer the following about the housekeeping costs:
a. What is the budget variance? Is it favorable or unfavorable?
b. What is the cost variance? Is it favorable or unfavorable?
c. What is the quantity volume variance? Is it favorable or unfavorable?