Reference no: EM132686048

Problem - Direct labor budget-service business

Executive Inn, Inc., operates a downtown hotel property that has 200 rooms. On average, 90% of Executive Inn's rooms are occupied on weekdays, and 60% are occupied during the weekend. The manager has asked you to develop a direct labor budget for the housekeeping and restaurant staff for weekdays and weekends. You have determined that the housekeeping staff requires 30 minutes to clean each occupied room. The housekeeping staff is paid $12 per hour. The restaurant has six full-time staff (eight-hour day) on duty, regardless of occupancy. However, for every 60 occupied rooms, an additional person is brought in to work in the restaurant for the eight-hour day. The restaurant staff is paid $10 per hour.

Required - Determine the estimated housekeeping, restaurant, and total direct labor cost for an average weekday and average weekend day. Format the budget in two columns, labeled as weekday and weekend day.