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Tju [1.3M]
3 years ago
14

Exercise 19-13 Variable cost analysis for a special order LO A1 Grand Garden is a luxury hotel with 160 suites. Its regular suit

e rate is $210 per night per suite. The hotel’s cost per night is $135 per suite and consists of the following. Variable direct labor and materials cost $ 36 Fixed cost [($5,770,000/160 suites) ÷ 365 days] 99 Total cost per night per suite $ 135 The hotel manager received an offer to hold the local Bikers’ Club annual meeting at the hotel in March, which is the hotel’s low season with an occupancy rate of under 55%. The Bikers’ Club would reserve 45 suites for three nights if the hotel could offer a 55% discount, or a rate of $94 per night. The hotel manager is inclined to reject the offer because the cost per suite per night is $135. Required: Prepare an analysis of this offer for the hotel manager.
Business
1 answer:
zysi [14]3 years ago
8 0

Answer:

If the special offer earns a positive contribution margin, we should accept the special order.

Explanation:

Given that,

No. of suites in luxury hotel = 160

Regular suite rate = $210 per night per suite

Hotel’s cost per night = $135 per suite

Variable direct labor and materials cost = $36

Fixed cost = 99

Total cost per night per suite = $135

Contribution margin per night per suite:

= Room rate per night - Variable cost per night

= $94 - $36

= $58

Contribution margin from special offer:

= Contribution margin per night per suite × Number of nights × Number of suits

= $58 × 3 × 45

= $7,830

Management should accept the special offer.

When the company receives offer, the hotel is running at low season. occupancy rate is 55%

If the special offer earns a positive contribution margin, we should accept the special order.

Room rate is $94 for special order.

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8 0
3 years ago
The following information is available for Blossom Company:
Aleonysh [2.5K]

Answer:

Total Assets = $124,510

Total Liabilities = $38,320

Total Stockholders' equity = $86,190

Explanation:

Blossom Company

Balance sheet

As at December 31, 2022

Assets

<em>Current assets</em>

Cash                                       $6,390

Accounts receivable                2,100

Supplies                                   3,800

Inventory                                  2,920

Total current asset                                 $15,210

<em>Non-current asset</em>

Equipment (net)                                      109,300

Total assets                                             124,510

Liabilities and Stockholders' Equity

<em>Current liabilities</em>

Accounts payable                   $4,500

Interest payable                            670

Unearned service revenue          820

Salaries and wages payable        830

Total current liabilities                           $6,820

<em>Long-term liabilities</em>

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Total liabilities                                        $38,320

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Common stock                                         58,900

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8 0
3 years ago
The United States Bureau of Labor Statistics (BLS) conducts the Quarterly Census of Employment and Wages (QCEW) and reports a va
Wittaler [7]

Answer:

Answer for the question:

The United States Bureau of Labor Statistics (BLS) conducts the Quarterly Census of Employment and Wages (QCEW) and reports a variety of information on each county in America. In the third quarter of 2016, the QCEW reported the total taxable earnings, in millions, of all wage earners in all 3222 counties in America.

is given in the attachment.

Explanation:

7 0
3 years ago
Cost of goods manufactured during the year is $240,000, and work in process inventory on December 31 is $50,000. Work in process
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Answer:

$165,000

Explanation:

The first step is to calculate the work in process inventory

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8 0
3 years ago
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Ahat [919]

Answer:

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Explanation:

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4 0
3 years ago
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