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 period 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, 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 in the current month's ending inventory. Rest Inn's sales budget for guest stays for the next quarter is as follows: June 2,500 guest stays July 2,700 guest stays August 2,300 guest stays How many spa packages should Rest Inn budget for purchase in July?

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 period 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, 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 in the current month's ending inventory. Rest Inn's sales budget for guest stays for the next quarter is as follows: June 2,500 guest stays July 2,700 guest stays August 2,300 guest stays How many spa packages should Rest Inn budget for purchase in July?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school. These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $22.00 each with a minimum order of 196 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 196. Since Hooper's plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $44.00 each. Hooper would pay the students a commission of $5.00 for each shirt sold. Required: 1. What level of unit sales and dollar sales is needed to attain a target profit of $13,328?…
Many of you will some day own your own business. One rapidly growing opportunity is no-frills workout centers. Such centers attract customers who want to take advantage of state-of-the-art fitness equipment but do not need the other amenities of full-service health clubs. One way to own your own fitness business is to buy a franchise. Snap Fitness is a Minnesota-based business that offers franchise opportunities. For a very low monthly fee ($26, without an annual contract), customers can access a Snap Fitness center 24 hours a day. The Snap Fitness website indicates that start-up costs range from $60,000 to $184,000. This initial investment covers the following pre-opening costs: franchise fee, grand opening marketing, leasehold improvements, utility/rent deposits, and training. Suppose that Snap Fitness estimates that each location incurs $4,000 per month in fixed operating expenses plus $1,460 to lease equipment. A recent newspaper article describing no-frills fitness centers…
The Shirt Works sells a large variety of tee shirts and sweatshirts Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $20.00 each with a minimum order of 220 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 220 Since Hooper's plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $40.00 each. Hooper would pay the students a commission of $600 for each shirt sold Required: 1. What level of unit sales and dollar sales is needed to attain a target profit of $12.320? 2.…
Over the winter months, Pharoah Co. pre-sells fertilizing and weed control lawn services to be performed from May through September, inclusive. If payment is made in full by April 1, a 5% discount is allowed. In March, 275 customers took advantage of the discount and purchased the summer lawn service package for $760 each. In June, 225 customers purchased the package for $800, and in July, 84 purchased it for the same price. For customers who pay after May 1, service starts in the month the customer makes the payment. How much revenue should be recognized by the Pharoah Co. in each of the months of March, April, May, June, July, August, and September? (Round answers to 0 decimal places, e.g. 5,275. Do not leave any answer field blank. Enter O for amounts.) March $ April $ May $ June $ July August September $
Analyze Cityscape Hotels Cityscape Hotels has 200 rooms available in a major metropolitan city. The hotel is able to attract business customers during the weekdays and leisure customers during the weekend. However, the leisure customers on weekends occupy fewer rooms than do business customers on weekdays. Thus, Cityscape plans to provide special weekend pricing to attract additional leisure customers. A hotel room is priced at $180 per room night. The cost of a hotel room night includes the following: Line Item Description Cost Per Room Night(at normal occupancy) Housekeeping service $23 Utilities 7 Amenities 3 Hotel depreciation 55 Hotel staff (excluding housekeeping) 42 Total $130 The special weekend price is proposed for $120 per room night. At this price, it is anticipated that average occupancy for the weekend (Friday, Saturday, and Sunday) will increase from 30% to 50% of available rooms. Question Content Area a. What is the contribution margin for a…
Freesure Company manufactures and sells commercial refrigerators. It is currently running a promotion in which it pays a $500 rebate to any customer that purchases a refrigeration unit from one of its participating dealers. The rebate must be returned within 90 days of purchase. Given its historical experience and the ease of obtaining a rebate, Freesure expects all qualifying customers to receive the rebate. Required: Prepare the journal entry to record the sale of a refrigerator to a participating dealer for $6,000.
please sovle thes
CIA Review, Inc. provides review courses twice each year for students studying to take the CIA exam. The cost of textbooks is included in the registration fee. Text material requires constant updating and is useful for only one course. To minimize printing costs and ensure the availability of books on the first day of class, CIA Review has books printed and delivered to its offices two weeks in advance of the first class. To ensure that enough books are available, CIA Review normally orders 10 percent more than expected enrollment. Usually, there is an oversupply, and books are thrown away. However, demand occasionally exceeds expectations by more than 10 percent and there are too few books available for student use CIA Review has been forced to turn away students because of a lack of textbooks. CIA Review expects to enroll approximately 200 students per course. The tuition fee is $810 per student. The cost of teachers is $22,000 per course, textbooks cost $59 each, and other operating…
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,…
The University of Cincinnati Center for Business Analytics is an outreach center that collaborates with industry partners on applied research and continuing education in business analytics. One of the programs offered by the center is a quarterly Business Intelligence Symposium. Each symposium features three speakers on the real-world use of analytics. Each corporate member of the center (there are currently 10) receives five free seats to each symposium. Nonmembers wishing to attend must pay $75 per person. Each attendee receives breakfast, lunch, and free parking. The following are the costs incurred for putting on this event: Rental cost for the auditorium: Registration Processing: Speaker Costs: Continental Breakfast: Lunch: Parking: (a) The Center for Business Analytics is considering a refund policy for no-shows. No refund would be given for members who do not attend, but nonmembers who do not attend will be refunded 50% of the price. Build a spreadsheet model that calculates a…
Kim Epson operates a full-service car wash, which operatesfrom 8 a.m. to 8 p.m., 7 days a week. The car wash has two sta-tions: an automatic washing and drying station and a manualinterior cleaning station. The automatic washing and dryingstation can handle 30 cars per hour. The interior cleaningstation can handle 200 cars per day. Based on a recent year-end review of operations, Kim estimates that future demandfor the interior cleaning station for the 7 days of the week, expressed in average number of cars per day, would be asfollows:Day Mon. Tues. Wed. Thurs. Fri. Sat. Sun.Cars 160 180 150 140 280 300 250By installing additional equipment (at a cost of $50,000), Kimcan increase the capacity of the interior cleaning station to300 cars per day. Each car wash generates a pretax contribu-tion of $4.00. Should Kim install the additional equipment ifshe expects a pretax payback period of three years or less?