Problem 1 The marketing department of New Generation Hotel is preparing its revenue budget for the year 20X2. The Hotel has 200 rooms and operates 365 days a year. For 20X1, the average room rate and the occupancy percentage were $150 and 80% respectively. The company's accountant has prepared the following forecast information for the year 20X1 in October 20X1 by incorporating 9 months actual and 3 months forecast. REVENUE Rooms Food & Beverage Spa TOTAL REVENUE 20X1 $8,760,000 $5,256,000 $876,000 $14,892,000 The following information relating to 20X2 has also been gathered: i. The management would like to increase the average room rate to $160 to cover rising costs, as a result of the higher room rate; occupancy is expected to drop to 78%. ii. Food & Beverage revenue varies with room night, the average Food & Beverage revenue is expected to be $90 per room night. iii. Spa revenue will go up to $903,670 because of price increases. Required: Based on the above information, prepare the budgeted revenue for the year ending 31 December 20X2.

Problem 1 The marketing department of New Generation Hotel is preparing its revenue budget for the year 20X2. The Hotel has 200 rooms and operates 365 days a year. For 20X1, the average room rate and the occupancy percentage were $150 and 80% respectively. The company's accountant has prepared the following forecast information for the year 20X1 in October 20X1 by incorporating 9 months actual and 3 months forecast. REVENUE Rooms Food & Beverage Spa TOTAL REVENUE 20X1 $8,760,000 $5,256,000 $876,000 $14,892,000 The following information relating to 20X2 has also been gathered: i. The management would like to increase the average room rate to $160 to cover rising costs, as a result of the higher room rate; occupancy is expected to drop to 78%. ii. Food & Beverage revenue varies with room night, the average Food & Beverage revenue is expected to be $90 per room night. iii. Spa revenue will go up to $903,670 because of price increases. Required: Based on the above information, prepare the budgeted revenue for the year ending 31 December 20X2.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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