AC3025- Hospitality Finance
Final Exam- revised June, 2012
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
2. 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.
3. 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
4. If menu prices increase by 5% next year and volume increases by 8% beginning January 1st, forecast sales for the first 6 months
MonthSalesPrice IncreaseVolume increase = Budget
January 35,000
February 38,000
March 44,500
April 32,500
May 48,000
June 46,000
5. Use the weighted average to compute the average room rate from the following information:
RoomsRate
Single45$65.00
Double55$85.00
Suite15$125.00
6. Use the following information
Sales = $537,000
Average Guest Check = $18.75
Food Cost Percent = 35.0%
IBIT = $150,000
Calculate Break-even point
7. Complete the in/off season analysis for the following information
Last YearIn-SeasonOff-SeasonIf 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
8. 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
Determine sales required to achieve an IBIT objective of $75,000
9. Calculate the payback period for the following project. Use straight-line depreciation.
Purchase of equipment$100,000
Annual Savings$30,000
Depreciable life of asset5 years
Salvage value0
10. Use the following information to determine the cause of sales variances: (10 points)
BudgetActualVariance
Room Sales463,500516,750
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
11. 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 100015002000
Sales Dollars
Variable Costs
Fixed Cost
_________________________________________________________________
IBIT
12. Calculate the first month's ending cash balance for the following:
Beginning cash balance of $15,000
$200,000 Sales, with 40% paid in cash. Half of the sales on account is paid equally in the month of sale and the next month.
Expenses were $120,000 all on credit. 20% paid in the month of purchase and the balance paid the second month.