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    Operation Budgeting

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    Nathan's Place, open 365 days, consists of an 100 room motel with a 50 seat restaurant shop.
    Nathan Harris provides you with the following information:
    1. Of the 100 rooms, 80 are doubles and 20 are singles.
    2. The doubles are sold for $65 each and the singles are sold for $50 each.
    3. Forecasted occupany is 80% for doubles and 70% for singles.
    4. The average occupancy per room is 1.8.( Only one person stays in a single but two or more may stay in a double for $65/night.)
    5. Forty percent of those staying in the singles and 20% of those staying in the doubles eat breackfast in the restaurant.( There is no walk-in business for breakfast)
    The average check is $5.80
    6. The lunch and dinner business have seat turnvers and average checks as follow:

    Lunch Dinner
    Turnover Aver. Check Turnover Aver. Check
    Mon-Fri 1,25 $6,00 1 $10,75
    Sat. 0,5 $6,50 1 $12,50
    Sun 1,5 $7,00 0,5 $11,25

    1. Forecast the amount of room sales for June 2001.
    2. Forecast the amount of breakfast sales for June 2001.( Assume the first day of June is a Monday.)
    3. Forecast the amount of Lunch sales for June 2001.
    4. Forecast the amount of dinner sales for June 2001.
    5. Assume revenue, other than food and room revenue, totals 15% of total sales. What is the forecast for other revenue for June 2001?

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    Solution Preview

    1. Forecast the amount of room sales for June 2001.
    Doubles Singles Total
    Capacity 80 20
    Occupancy 80% 70%
    Number of room sales 64 14 78
    Per room realisation (in $) 65 50
    Amount of daily room sales ($) 4160 700 4860
    Monthly 145800

    2. Forecast the amount of breakfast sales for June ...

    Solution Summary

    This discusses the steps to formulate Operation Budgeting.