Sales Revenue Variable Costs Fixed costs Profit Number of rooms occupied Sales Room Rate Variable Costs Actual £ 579,500 213,500 100,000 266,000 6,100 Head Office Budget Assumptions 80% occupancy per month (30 days) £105 per night £25 per room per night Fixed/Overhead Costs £1,000 per night There is also a profit target for each hotel of £120,000 per month. Requirement: Section B of your report to the Exeter hotel manager Evaluate performance for the quarter to budget and provide recommendations for budgeting and cost management.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Step by step
Solved in 4 steps with 1 images
