User Account

All Pages

What is the full cost per room-night

Assignment Help Cost Accounting
Reference no: EM132815644

Cheap Stay Inc. is considering building a budget hotel that offers clean small rooms with bathrooms. They anticipate that the 120 rooms will rent for 36,000 room-nights per year. The market price for equivalent rooms is $60 per night. Cheap Stay estimates that the cost of capital will be $7,900,000 and they would like an annual return on 15%.

Following are the estimated annual operating costs:

Variable operating costs $18 per room night Fixed Costs:

Salaries and wages $450,000

Building maintenance 86,000

General administration 230,000

Total fixed costs $766,000

REQUIRED:

Problem 1. What is the full cost per room-night?

Problem 2. Can Cheap Stay Inc. meet the targeted return on investment based on the estimated costs and revenue? Show your calculations.

Problem 3. A tour operator has offered $30 per room per night for 20 rooms during a time of the year that there is likely to be at least that many rooms vacant. Should Cheap Stay Inc. accept this offer?

Reference no: EM132815644

Questions Cloud

Determine tony hawk inc should accept the supplier : Tony Hawk Inc. (Hawk), Determine whether Tony Hawk Inc. should accept the supplier's offer to provide 20,000 tackle boxes at $54 per box.
Discuss what you believe to be dominant culture in the us : 1. Please share the culture you identify with and the values, norms, and sanctions associated with it. (This can be any culture or subculture/counterculture)
Write about the Strengths Of Traditional Training : Question - Write about the Strengths and Weaknesses Of Traditional Training with That of Online Learning (E-Learning)
What is a subculture : What is a subculture? Give an example. What is the normalization effect that occurs inside sub-cultural groups?
What is the full cost per room-night : Can Cheap Stay Inc. meet the targeted return on investment based on the estimated costs and revenue? Show your calculations.
Define what is mcdonaldization : Describe briefly with the aid of examples the five dimensions of mcdonaldization - a/efficiency, b/ predictability, c/ calculability, d/ control, and e/ the irr
Calculate mr brown and mr black respective share : Calculate Mr. Brown's and Mr. Black's respective share of the cost using the incremental method. Assume Mr. Brown to be the primary party.
Workplace conflict situation in a stepwise process : Explain how you would resolve a workplace conflict situation in a stepwise process?
Explain the Advantages of Online Learning : Question - Explain the Advantages of Online Learning in Higher Education

Reviews

Write a Review

Cost Accounting Questions & Answers

  Construct a cost reconciliation report for the department

In July, one of the processing departments at Junkin Corporation, Construct a cost reconciliation report for the department for the month of July.

  Calculate revenue needed to earn a target operating income

Calculate the number of package tours that must be sold to break even and calculate the revenue needed to earn a target operating income of $91,000.

  Which bank overdrafts held at a different bank

On the balance sheet, bank overdrafts held at a different bank from the company's main chequing account should? be reported as restricted cash.

  Compute amount of overhead allocated to small advertising

Calculate the amount of overhead allocated to small and large advertising campaigns under existing methods. Apply activity-based costing to calculate the cost per cost driver for each of the cost pools.

  What assumption is implicitly made about cost behavior

What assumption is implicitly made about cost behavior when all of the items in a budget are adjusted in proportion to a change in activity? Why is this assumption questionable?

  How much cash will eber wares collect in may

The sale, with 3% uncollectible. A 2% cash discountis given to payments collected in the month of sales. How much cash will Eber Wares collect in May?

  Financial statements or footnotes

Give any audit steps that Rekdahl should conduct to evaluate if the company is in compliance with the bond indentures and show any reporting requirements that financial statements or footnotes should include.

  Should production and sale of the racing bikes

Should production and sale of the racing bikes be discontinued? Explain. The Regal Cycle Company manufacturers three types of bicycles

  Find cost of goods sold for the month of june should be

Find cost of goods sold for the month of June should be increased (decreased) by the amount of over/under applied factory overhead of

  Calculate number of beers that green lantern should request

Calculate the number of beers that Green Lantern should request in each order. Determine the order-size decision Green Lantern should make

  What is the cost reduction

What is Time between Orders (TBO)? The sales of Whole Care mouthwash at Tom's of Maine over the past six months have averaged 2,000 cases

  What is the internal rate of return of the investment

Assuming Tanya wishes to evaluate the project with a 7-year time horizon, what is the internal rate of return of the investment?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd