p&l and break even point questions

Description

Complete the 5 prompts on the attached worksheet. Show all the calculations. Please make sure that the presentation of your results is clear.

question 1 allows you to estimate revenue and expenses (using USALI I/S). There are 3 revenue streams: Rooms, F&B and Miscellaneous income. Don’t forget to estimate the income taxes;

question 2 allows to convert these expenses in fixed and variable costs;

question 3: using Total revenue and Total variable costs, you can estimate CMRw;
question 4: using Total fixed costs (question 2) and CMRw (question 3), you can estimate the break even point;
question 5: you need to estimate first the pretax income (EBT), before estimating total revenue, and then rooms revenue and corresponding occupancy.

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Using the following information for the Blue Moon hotel:
Open
Rooms
ADR
Occupancy
Revenue
Rooms
Food
Beverage
Other food & beverage
Miscellaneous income
Total revenue
$
365 days
387
156.00
81%
Ratio to sales
65.50%
15.90%
4.00%
8.50%
6.10%
100.00%
Departmental expenses
Rooms
Food & beverage
Total department expenses
38.60%
89.60%
50.73%
Departmental profits
Rooms
Food & beverage
Total departmental profit
61.40%
10.40%
49.27%
Undistributed operating expenses
Administrative & general
Information and telecommunication sytems
Marketing (excluding franchise)
Franchise fees
Utility costs
Property operation & maintenance
Total undistributed operating expenses
7.70%
1.40%
5.30%
0.10%
2.10%
4.30%
20.90%
Gross operating profit
Base management fees
Incentive management fees
Income before fixed charges
28.37%
3.10%
1.80%
23.47%
Fixed charges
Property taxes
Insurance
EBITDA
5.50%
0.50%
17.47%
Fixed
80%
80%
Fixed
90%
100%
60%
0%
90%
90%
Fixed
0%
0%
Fixed
100%
100%
Additional information
Depreciation and amortization (year)
Interest (per year)
Income taxes
$
$
650,000
222,000
21%
Fixed
100%
100%
Required:
1. Prepare a profit loss according to the USALI, assuming the hotel operates 365 days . You have to pr
2. Prepare a profit and loss showing variable costs and fixed costs (you can use a similar presentation
3. Compute the weighted average CMR for the Blue Moon hotel.
4. Compute the break even point for the Blue Moon hotel.
5. If the Blue Moon hotel wants to achieve $3,500,000 net income, what must its room sales be? Wh
Variable
20%
20%
Variable
10%
0%
40%
100%
10%
10%
Variable
100%
100%
Variable
0%
0%
Variable
0%
0%
perates 365 days . You have to present three departments/revenue streams: rooms, food and beverage, and miscellaneous inc
u can use a similar presentation than problem 23, p. 391)
hat must its room sales be? What is the corresponding occupany rate?

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