Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 1, Problem 6BE
Jake’s Cabins is a small motel chain with locations near the national parks of Utah, Wyoming, and Montana. The chain has a total of 500 guest rooms. The following operating data are available for June:
- a. Determine the guest nights for June.
- b. Determine the available room nights for June.
- c. Determine the occupancy rate for June.
- d. Assume that the occupancy rate for June of the prior year was 82%. Has the utilization rate for Jake’s Cabins improved or declined?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Jake's Cabins is a small motel chain with locations near the national parks of Utah,wyomong and Montans . The chain has a total of 500 guest rooms. The folllowing operating data are available for june:
a.Determine the guest nights for june
b.Determine the available room nights for June
c.Determine the occupancy rate for June
d. Assume that the occupancy rate for June of the prior year was 82%.Has the utilization rate for Jake;s Cabins improved or declined?
The problem says:
jakes cabins is a small hotel chain with locations near the national parks of Utah Wyoming Montana. The chain has a total of 500 guestrooms. The following operating data are available for June. See the attached photo.
I need to figure out how I determine the available room nights for June and how I determine the occupancy rate for June.
Kim Epson operates a full-service car wash, which operates from 8 a.m. to 8 p.m., 7 days a week. The car wash has two stations: an automatic washing and drying station and a manual interior cleaning station. The automatic washing and drying station can handle 30 cars per hour. The interior cleaning station can handle 200 cars per day. Based on a recent yearend review of operations, Kim estimates that future demand for the interior cleaning station for the 7 days of the week, expressed in average number of cars per day, would be as follows:
Day
Mon.
Tues.
Wed.
Thurs.
Fri.
Sat.
Sun.
Cars
160
180
150
140
280
300
250
By installing additional equipment (at a cost of $50,000), Kim can increase the capacity of the interior cleaning station to 300 cars per day. Each car wash generates a pretax contribution of $4.00. Should Kim install the additional equipment if she expects a pretax payback period of three years or less?
Chapter 1 Solutions
Managerial Accounting
Ch. 1 - Prob. 1DQCh. 1 - Prob. 2DQCh. 1 - What manufacturing cost term is used to describe...Ch. 1 - Distinguish between prime costs and conversion...Ch. 1 - What is the difference between a product cost and...Ch. 1 - Name the three inventory accounts for a...Ch. 1 - In what order should the three inventories of a...Ch. 1 - What are the three categories of manufacturing...Ch. 1 - How do the manufacturing costs incurred during a...Ch. 1 - How does the Cost of goods sold section of the...
Ch. 1 - Management process Three phases of the management...Ch. 1 - Prob. 2BECh. 1 - Prime and conversion costs Identify the following...Ch. 1 - Product and period costs Identify the following...Ch. 1 - Cost of goods sold, cost of goods manufactured...Ch. 1 - Jakes Cabins is a small motel chain with locations...Ch. 1 - Indicate whether each of the following costs of an...Ch. 1 - Indicate whether the following costs of Procter ...Ch. 1 - Prob. 3ECh. 1 - For apparel manufacturer Abercrombie Fitch, Inc....Ch. 1 - From the choices presented in parentheses, choose...Ch. 1 - Prob. 6ECh. 1 - Classifying costs In a service company A partial...Ch. 1 - Classifying costs The following is a manufacturing...Ch. 1 - Financial statements of a manufacturing firm The...Ch. 1 - Manufacturing company balance sheet Partial...Ch. 1 - Cost of direct materials used in production for a...Ch. 1 - Prob. 12ECh. 1 - Cost of goods manufactured for a manufacturing...Ch. 1 - Income statement for a manufacturing company Two...Ch. 1 - Statement of cost of goods manufactured for a...Ch. 1 - Cost of goods sold, profit margin, and net income...Ch. 1 - Cost flow relationships The following information...Ch. 1 - The following is a list of costs that were...Ch. 1 - The following is a list of costs incurred by...Ch. 1 - A partial list of Foothills Medical Centers costs...Ch. 1 - Manufacturing income statement, statement of cost...Ch. 1 - Statement of cost of goods manufactured and income...Ch. 1 - Prob. 1PBCh. 1 - The following is a list of costs incurred by...Ch. 1 - A partial list of The Grand Hotels costs follows:...Ch. 1 - Several items are omitted from the income...Ch. 1 - Statement of cost of goods manufactured and income...Ch. 1 - Comfort Plus, Inc., has a hotel with 300 rooms in...Ch. 1 - Prob. 2MADCh. 1 - Comparing occupancy for two hotels Sunrise Suites...Ch. 1 - Prob. 4MADCh. 1 - Prob. 5MADCh. 1 - Prob. 1TIFCh. 1 - Communication Todd Johnson is the Vice President...Ch. 1 - For each of the following managers, describe how...Ch. 1 - The following situations describe scenarios that...Ch. 1 - Geek Chic Company provides computer repair...Ch. 1 - Which of the following items would not be...Ch. 1 - Prob. 2CMACh. 1 - A firm has 100,000 in direct materials costs,...Ch. 1 - In practice, items such as wood screws and glue...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Comfort Plus, Inc., has a hotel with 300 rooms in a metropolitan city. Its main competitor, Connors Hotel, has a hotel with 350 rooms in the same city. The following operating data are available for April for the two hotels: a. Determine the guest nights for each hotel in April. b. Determine the available room nights for each hotel in April. c. Determine the occupancy rate for each hotel in April. d. Which hotel has the better utilization of capacity in April?arrow_forwardSara is considering whether to open a gadgets shop. She provided you, as a consultant, the following information: Sales of $60,000 and $72,000 are expected for July and August, respectively. All goods are sold on account. The collection pattern for Accounts Receivable is 80 percent in the month of sale and 20 percent in the month following the sale. Purchases of $40,000 and $54,000 are expected for July and August. The payment pattern for purchases is 70 percent in the month of purchase, 30 percent in the month following the purchase. Other monthly expenses are $8,000, which includes $2000 of depreciation. All operating expenses are paid in the month of their incurrence. $2,000 of cash is available on August 1, 2021. Required: Prepare the cash collection budget for the two months ending August 31, 2021 Prepare the cash budget for the two months ending August 31, 2021arrow_forwardDonaldson Bed and Breakfast has six available rooms to rent to tourists visiting Niagara Falls. Guests enjoy a comfortably appointed room with an attached bathroom and the owners provide a hearty breakfast each morning. The owners have calculated that their typical occupancy rate is 80% per month. The cost to rent each room is $65 per occupied room per day assuming a 30-day month. Some of this cost is fixed and some variable. During the month of June, the occupancy rate went down to 60% and the total cost to operate that month was $7, 650. Required: 1. Using the high-low method, estimate the variable and fixed cost elements of the bed and breakfast's operation in a typical month. Note: Do not round your intermediate calculations. Round the "Variable cost per room" to 2 decimal places. Average # room nights rented per month Total Monthly Cost High level of activity Low level of activity Change Variable cost per room Fixed cost per year 2. Express the variable and fixed costs in the form…arrow_forward
- Sunrise Suites and Nationwide Inns operate competing hotel chains across the region. Hotel capacity information for both hotels is as follows: Number of Hotels Average Number of Rooms per Hotel Sunrise Suites 120 90 Nationwide Inns 150 76 Information on the number of guests for each hotel and the average length of visit for June were as follows: Number of Guests Average Length of Visit (in Nights) Sunrise Suites 183,600 1.5 Nationwide Inns 228,000 1.2 a. Determine the guest nights for each hotel in June. Guest Nights Sunrise Suites fill in the blank 1 Nationwide Inns fill in the blank 2 b. Determine the room nights for each hotel in June. Room Nights Sunrise Suites fill in the blank 3 Nationwide Inns fill in the blank 4 c. Determine the occupancy rate of each hotel in June. Occupancy Rate Sunrise Suites fill in the blank 5 % Nationwide Inns fill…arrow_forwardAssume a hotel rented 400, 480, and 420 rooms in the months of April, May, andJune, respectively; and the total housekeeping costs for the three months in question were $6,000, $6,800, and $6,200. With use of the high-low method, what is theamount of monthly fixed housekeeping costs?a. $1,000b. $1,500c. $2,000d. $2,500arrow_forwardOsborne Manufacturing produces self-watering planters for use in upscale retail establishments. Sales projections for the first five months of the upcoming year show the estimated unit sales of the planters each month to be as follows: The data from the table are as follows: # of planters to be sold January: 3,400 February: 3,800 March: 3,300 April: 4,900 May: 4,600. Inventory at the start of the year was 850 planters. The desired inventory of planters at the end of each month in the upcoming year should be equal to 25% of the following month’s budgeted sales. Each planter requires three pounds of polypropylene (a type of plastic). The company wants to have 20% of the polypropylene required for next month’s production on hand at the end of each month. The polypropylene costs $0.20 per pound. Requirements Prepare a production budget for each month in the first quarter of the year,…arrow_forward
- Kim Epson operates a full-service car wash, which operatesfrom 8 a.m. to 8 p.m., 7 days a week. The car wash has two sta-tions: an automatic washing and drying station and a manualinterior cleaning station. The automatic washing and dryingstation can handle 30 cars per hour. The interior cleaningstation can handle 200 cars per day. Based on a recent year-end review of operations, Kim estimates that future demandfor the interior cleaning station for the 7 days of the week, expressed in average number of cars per day, would be asfollows:Day Mon. Tues. Wed. Thurs. Fri. Sat. Sun.Cars 160 180 150 140 280 300 250By installing additional equipment (at a cost of $50,000), Kimcan increase the capacity of the interior cleaning station to300 cars per day. Each car wash generates a pretax contribu-tion of $4.00. Should Kim install the additional equipment ifshe expects a pretax payback period of three years or less?arrow_forwardWillingham Construction is in the business of building high-priced, custom, single-family homes. The company,headquartered in Anaheim, California, operates throughout the Southern California area. The construction periodfor the average home built by Willingham is six months, although some homes have taken as long as nine months.You have just been hired by Willingham as the assistant controller and one of your first tasks is to evaluate thecompany’s revenue recognition policy. The company presently recognizes revenue upon completion for all of itsprojects and management is now considering whether revenue recognition over time is appropriate.Required:Write a 1- to 2-page memo to Virginia Reynolds, company controller, describing the differences between theeffects of recognizing revenue over time and upon project completion on the income statement and balance sheet.Indicate any criteria specifying when revenue should be recognized. Be sure to include references to GAAP asthey pertain to…arrow_forwardElliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of 25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,500 orders per year. The cost of each PC system is 1,100 per year. In addition to the salaries, Elliott spends 27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. Required: 1. Classify the resources associated with purchasing as (1) flexible or (2) committed. 2. Compute the total activity availability, and break this into activity usage and unused activity. 3. Calculate the total cost of resources supplied (activity cost), and break this into the cost of activity used and the cost of unused activity. 4. (a) Suppose that a large special order will cause an additional 500 purchase orders. What purchasing costs are relevant? By how much will purchasing costs increase if the order is accepted? (b) Suppose that the special order causes 700 additional purchase orders. How will your answer to (a) change?arrow_forward
- Lakeesha Barnett owns and operates a package mailing store in a college town. Her store, Send It Packing, helps customers wrap items and send them via UPS, FedEx, and the USPS. Send It Packing also rents mailboxes to customers by the month. In May, purchases of materials (stamps, cardboard boxes, tape, Styrofoam peanuts, bubble wrap, etc.) equaled 11,450; the beginning inventory of materials was 1,050, and the ending inventory of materials was 950. Payments for direct labor during the month totaled 25,570. Overhead incurred was 18,130 (including rent, utilities, and insurance, as well as payments of 14,050 to UPS and FedEx for the delivery services sold). Since Send It Packing is a franchise, Lakeesha owes a monthly franchise fee of 5 percent of sales. She spent 2,750 on advertising during the month. Other administrative costs (including accounting and legal services and a trip to Dallas for training) amounted to 3,650 for the month. Revenues for May were 102,100. Required: 1. What was the cost of materials used for packaging and mailing services during May? 2. What was the prime cost for May? 3. What was the conversion cost for May? 4. What was the total cost of services for May? 5. Prepare an income statement for May. 6. Of the overhead incurred, is any of it direct? Indirect? Explain.arrow_forwardComparing occupancy for two hotels Sunrise Suites and Nationwide Inns operate competing hotel chains across the region. Hotel capacity information for both hotels is as follows: Information on the number of guests for each hotel and the average length of visit for June were as follows: A. Determine the guest nights for each hotel in June. B. Determine the room nights for each hotel in June. C. Determine the occupancy rate of each hotel in June. D. Interpret the results in (C).arrow_forwardOlympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,000 for the Sleepeze, 12,000 for the Plushette, and 5,000 for the Ultima. Gene Dixon, vice president of sales, has provided the following information: a. Salaries for his office (including himself at 65,000, a marketing research assistant at 40,000, and an administrative assistant at 25,000) are budgeted for 130,000 next year. b. Depreciation on the offices and equipment is 20,000 per year. c. Office supplies and other expenses total 21,000 per year. d. Advertising has been steady at 20,000 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 15 percent of first-year Ultima sales for a print and television campaign. e. Commissions on the Sleepeze and Plushette lines are 5 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores. f. Last year, shipping for the Sleepeze and Plushette lines averaged 50 per unit sold. Gene expects the Ultima line to ship for 75 per unit sold since this model features a larger mattress. Required: 1. Suppose that Gene is considering three sales scenarios as follows: Prepare a revenue budget for the Sales Division for the coming year for each scenario. 2. Prepare a flexible expense budget for the Sales Division for the three scenarios above.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Product Life Cycle Explained | Apple iPhone & Coca Cola Examples; Author: Two Teachers;https://www.youtube.com/watch?v=ob5KWs3I3aY;License: Standard Youtube License