Your assignment is to prepare a hotel income statement for analysis and then evaluate the hotel's performance by comparing actual results to budget for a 4-month, year-to-date period. Students are to evaluate revenue, departmental expenses, and undistributed operating expenses for the purpose of determining their impact on gross operating profit (income before fixed charges).
1. Part I submit an income statement using a spreadsheet that consists of 10 columns: Budget dollar figures for the 4-month period (given)
Actual dollar figures for the 4-month period (given)
Absolute differences between the budget and actual figures
Relative differences between the budget and actual figures
*Percentage of revenues for actual figures *Percentage of revenues for budget figures Per occupied room for actual figures
Per occupied room for budget figures Per available room for actual figures Per available room for budget figures
*When calculating 'percentage of revenues', all revenue categories are calculated as a percentage of total revenue. Departmental costs & expenses are normally based on a percentage of their respective revenue source (i.e. room to room, food to food, telephone to telephone, etc.). Undistributed operating expenses and fixed charges are computed as a percentage of total revenue.
2. Part II The second part of the assignment will include the submission of a 3-page, double-spaced paper explaining the hotel's performance versus budget for the 4-month period. The written assignment focuses on the student's ability to explain how the hotel achieved the increase in its actual GOP from the budget. The written analysis should contain reference to revenues, and control of both departmental and undistributed expenses. Please refer to the `guideline' on the next page when writing the paper.