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
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.
2. 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
3. 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
4. Use the following information
•Sales = $537,000
•Average Guest Check = $18.75
•Food Cost Percent = 35.0%
•IBIT = $150,000
Calculate Break-even point
5. 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
6. 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
7. Determine sales required to achieve an IBIT objective of $75,000
8. 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
9. Use the following information to determine the cause of sales variances:
•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
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