Share
Explore BrainMass

Operation Budgeting

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

Q.
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?

Attachments

Solution Preview

Q.
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.

$2.19