Purchases BudgetRest Inn provides four-star accommodations for the vacation traveler. It is located just off a major interstate freeway. There are three other competing motels at the same exit. Hotel management is preparing its budget for the busiest three-month periodof the year, June through August. To differentiate themselves from the competition, Rest Inn provides a complimentary spa package for each guest stay that includes specialty shampoo, conditioner, soap, lotion, toothpaste, lavender essential oil, slippers,earplugs, and a sleep mask. Rest Inn purchases the spa package from a local vendor that puts the Rest Inn private label on the products. The hotel follows a policy of purchasing enough spa packages to ensure that 40% of next month's bookings are inthe current month's ending inventory. Rest Inn's sales budget for guest stays for the next quarter is as follows:June 2,400 guest staysJuly2,600 guest staysAugust 2,200 guest staysHow many spa packages should Rest Inn budget for purchase in July?0spa packagesCheck

Purchases Budget Rest Inn provides four-star accommodations for the vacation traveler. It is located just off a major interstate freeway. There are three other competing motels at the same exit. Hotel management is preparing its budget for the busiest three-month perio of the year, June through August. To differentiate themselves from the competition, Rest Inn provides a complimentary spa package for each guest stay that includes specialty shampoo, conditioner, soap, lotion, toothpaste, lavender essential oil, slipper earplugs, and a sleep mask. Rest Inn purchases the spa package from a local vendor that puts the Rest Inn private label on the products. The hotel follows a policy of purchasing enough spa packages to ensure that 40% of next month's bookings are in the current month's ending inventory. Rest Inn's sales budget for guest stays for the next quarter is as follows: June 2,400 guest stays July 2,600 guest stays August 2,200 guest stays How many spa packages should Rest Inn budget for purchase in July? 0 spa packages Check

Purchases Budget Rest Inn provides four-star accommodations for the vacation traveler. It is located just off a major interstate freeway. There are three other competing motels at the same exit. Hotel management is preparing its budget for the busiest three-month perio of the year, June through August. To differentiate themselves from the competition, Rest Inn provides a complimentary spa package for each guest stay that includes specialty shampoo, conditioner, soap, lotion, toothpaste, lavender essential oil, slipper earplugs, and a sleep mask. Rest Inn purchases the spa package from a local vendor that puts the Rest Inn private label on the products. The hotel follows a policy of purchasing enough spa packages to ensure that 40% of next month's bookings are in the current month's ending inventory. Rest Inn's sales budget for guest stays for the next quarter is as follows: June 2,400 guest stays July 2,600 guest stays August 2,200 guest stays How many spa packages should Rest Inn budget for purchase in July? 0 spa packages Check

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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Beauty Spa & Co. manufactures a specialised luxury spa that is supplied to five-star hotels around the country. The owner provides you with the following information to prepare its 1st quarter budget: July, August, and September. Budgeted sales are as follows: Month Sales ($) Units Sold May 25,000 250 June 28,000 280 July 30,000 300 August 40,000 400 September 35,000 350 October 37,000 370 Additional information: i) Purchases are budgeted at $5.00 per unit and are paid for in full in the month after purchase. ii) Closing inventory must equal 50% of the next month’s sales. iii) Sales (which are all on credit) are collected as follows: 60% in the month of sale; 30% in the month after the sale; 5% in the second month after the sale. iv) The balance in the bank account as of 30 June is $10,000. Required (show your workings for each question): Prepare the schedule of expected cash collections from…
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Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 7-day, 6-night trip to Cancun and a 5-day, 4-night trip to Jamaica, have the following characteristics: Package Specifications Oceanfront room; number of nights Meals: Breakfasts Lunches Dinners Scuba diving trips Water skiing trips Transportation to and from airport Airfare (round trip from Miami) Cost Data Cancun 6 Jamaica 4 $ 55/night $ 10/ea 7 6963. 454221 4 1 1 1 $ 15/ea $ 25/ea $ 75/ea $ 50/ea $ 375 (Cancun), $ 550 (Jamaica) $ 25 (Cancun), $ 40 (Jamaica) The Cancun trip sells for $1,750, and the Jamaica trip sells for $1,500, and both packages allow two bags to be checked for free. Required: 1. What are the current profit margins on both trips? 2. Take-a-Break's management believes that it must drop the price of each trip by $100 in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels. Complete this question by…
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Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 7-day, 6-night trip to Cancun and a 5-day, 4-night trip to Jamaica, have the following characteristics: Package Specifications Oceanfront room; number of nights Cancun Jamaica 6 4 Cost Data Meals: Breakfasts Lunches Dinners Scuba diving trips Water skiing trips Airfare (round trip from Miami) Transportation to and from airport 454221 7 69634L 1 1 1 $73/night $10/ea $15/ea $25/ea $93/ea $68/ea $400 (Cancun), $500 (Jamaica) $60 (Cancun), $66 (Jamaica) The Cancun trip sells for $2,100, and the Jamaica trip sells for $1,860, and both packages allow two bags to be checked for free. Required: 1. What are the current profit margins on both trips? 2. Take-a-Break's management believes that it must drop the price of each trip by $118 in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels.
Annie's Homemade is deciding whether to retain or drop a 700-square feet satellite shop location. The company makes the ice cream sold at the satellite location at its larger main shop location. Twice a month the company transports ice cream from its main shop to the satellite location. The company gathered the following additional information to assist in making the decision: Annual sales at the satellite location i Ingredient costs as a percent of sales Monthly rent at satellite location (the lease is cancelable). Average monthly utility expense at satellite location. Part-time store managers' combined annual wages at satellite location Annual hourly wages paid to additional employees at satellite location Annual hours spent by salaried managers at the main shop location supporting the satellite location i Other annual expenses: Annual depreciation expense on satellite store's equipment (no salvage value) Annual pickup truck and cargo trailer depreciation, insurance, registration,…
Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management Identified two cost drivers for budgeting purposes-the number of cruises and the number of passengers. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 85 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below: Vessel operating costs Advertising Fixed Cost Cost per per Cost per Month Cruise Passenger $ $ 3.30 6,000 470.00 $ $ 2,400 Administrative $ $ $ 1.50 costs 5,700 35.00 Insurance $ 3,700 For example, vessel operating costs should be $6,000 per month plus $470.00 per cruise plus $3.30 per passenger. The company's sales should average $28.00 per passenger. In July, the company provided 53 cruises for a total of 3,200 passengers. Required: Prepare the company's flexible budget for July. Alyeski Tours Flexible Budget For the Month Ended July 31…
Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 7-day, 6-night trip to Cancun and a 5-day, 4-night trip to Jamaica, have the following characteristics: Package Specifications Oceanfront room; number of nights Meals: Breakfasts Lunches Dinners Scuba diving trips Water skiing trips Airfare (round trip from Miami) Transportation to and from airport Required 1 Required 2 Profit margin Profit margin (%) Required 1 $200 (Cancun), $405 (Jamaica) $29 (Cancun), $44 (Jamaica) The Cancun trip sells for $1,800, and the Jamaica trip sells for $1,560, and both packages allow two bags to be checked for free. Cancun Profit margin Profit margin (%) Required 2 Complete this question by entering your answers in the tabs below. % Cancun Required: 1. What are the current profit margins on both trips? 2. Take-a-Break's management believes that it must drop the price of each trip by $103 in order to remain competitive in the market. Recalculate…