University Inn's most recent monthly expense analysis report revealed significant cost overruns. The manager was asked to explain the deviations. Below is the "budget v. actual" expense report for the month in question. Actual Budget Fire insurance on the hotel building $2,200 $2,000 Towels used in the gym 500 400 Room cleaning supplies 300 200 Flowers for the reception desk 600 800 Staff wages 60,000 55,000 Management salaries 49,500 45,000 Utilities 11,000 10,000 Maintenance 35,000 30,000 Total $159,100 $143,400 The Inn has observed that towels used in the gym, room cleaning supplies, staff wages, and utilities all vary with activity. The other costs are fixed. The university's football team was on a winning streak and numerous alumni were returning to campus in October, resulting in a 90% occupancy rate during the month. The preceding budget was based upon an assumed 60% occupancy rate. Calculate total budgeted expenses based on a 90% occupancy rate. A. $143,400 B. $148,100 C. $176,200 D. $171,200 E. none of the above
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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University Inn's most recent monthly expense analysis report revealed significant cost overruns. The manager was asked to explain the deviations. Below is the "budget v. actual" expense report for the month in question.
Actual
Budget
Fire insurance on the hotel building
$2,200
$2,000
Towels used in the gym
500
400
Room cleaning supplies
300
200
Flowers for the reception desk
600
800
Staff wages
60,000
55,000
Management salaries
49,500
45,000
Utilities
11,000
10,000
Maintenance
35,000
30,000
Total
$159,100
$143,400
The Inn has observed that towels used in the gym, room cleaning supplies, staff wages, and utilities all vary with activity. The other costs are fixed.
The university's football team was on a winning streak and numerous alumni were returning to campus in October, resulting in a 90% occupancy rate during the month. The preceding budget was based upon an assumed 60% occupancy rate.
Calculate total budgeted expenses based on a 90% occupancy rate.
A. $143,400
B. $148,100
C. $176,200
D. $171,200
E. none of the above
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