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    Accounting analysis, high-low and Contribution Margins

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    Managerial Accounting, Third Edition by James Jiambalvo
    "Solving Managerial Accounting Problems Using Microsoft Excel for Windows Templates by Rex A Schildhouse"

    PROBLEM P4-6 - Account Analysis, High-Low, Contribution Margin
    Information on occupancy and costs at the New Light Hotel for April, May, and June are indicated below:

    April May June
    Occupancy 1,500 1,650 1,800
    Day manager salary $4,200 $4,200 $4,200
    Night manager salary 3,700 3,700 3,700
    Cleaning staff 15,300 15,600 15,900
    Depreciation 12,000 12,000 12,000
    Complimentary continental 4,600 5,300 5,800
    breakfast:food and beverages
    Total
    $39,800 $40,800 $41,600

    Required

    a. Calculate the fixed costs per month and the variable cost per occupied room using account analysis for April.

    Account Analysis
    Fixed costs per month (April~June data):
    Day Manager Salary Amount
    Night Manager Salary Amount
    Depreciation Amount
    Formula

    Variable costs per month (April data):
    Cleaning Staff Amount
    Complimentary continental breakfast: Amount
    food and beverages Formula
    Divided by number of rooms Number
    Variable costs per room Formula

    b. Calculate the fixed costs per month and the variable cost per occupied room using the high-low method.

    Per occupied room of variable cost:
    (Amount - Amount )÷ Amount = Formula

    Fixed costs per month:
    Amount - (Amount * Number)= Formula

    c. Average room rates are $110 per night. What is the contribution margin per occupied room? In answering this question, use your variable cost estimate from Part b.
    Contribution margin per occupied room:
    Amount - Amount = Formula

    © BrainMass Inc. brainmass.com April 3, 2020, 7:39 pm ad1c9bdddf
    https://brainmass.com/business/accounting/accounting-analysis-high-low-contribution-margins-273211

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    Solution Summary

    The solution shows fixed cost, variable cost using high low method, accounting analysis.

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