MANAGERIAL ACCOUNTING – problems – HOSPITALITY OPERATIONS
school year 2015-2016
INCOME STATEMENT
Case 1 What happened to your mix of sales?
Determine the mix of sales for 2010, 2011 and 2012 by taking the type of sales as a % of the total
sales.
Type of Sales 2010 % 2011 % 2012 %
Rooms sales € 400,000 57.1 € 420,000 60.9 € 410,000 63.6
Food sales € 200,000 28.6 € 180,000 26.1 € 150,000 23.3
Beverage sales € 100,000 14.3 € 90,000 13.0 € 85,000 13.2
TOTAL SALES € 700,000 100.0 € 690,000 100.0 € 645,000 100.0
What happened to the mix of sales the last 3 years?
Case 2 Type of costs: operating, overhead or fixed charge?
Determine for the following costs whether it’s an operating cost, overhead expense or a fixed charge.
expense operating overhead fixed charges
Cost of food and beverage sold v
Depreciation v
General manager’s salary v
Marketing costs v
Laundry expenses v
Property fire insurance v
Repair and maintenance v
Rooms division salaries v
Case 3 How profitable is your business?
The controller of hotel-restaurant Happy Together collected the following information for 2012:
Rooms revenues € 1,000,000
Food & Beverage revenues € 400,000
Cost of F&B sales € 100,000
Operating expenses – Rooms € 300,000
Operating expenses – F&B € 200,000
Overhead € 500,000
Fixed charges € 300,000
Calculate the following figures:
Departmental income Rooms 1,000,000 – 300,000 = 700,000
Gross profit F&B 400,000 – 100,000 = 300,000
Departmental income F&B 400,000 – 200,000 = 200,000 (operating exp. incl. costs of f&b )
Gross operating profit (700,000 + 200,000) – 500,000 = 400,000
Overall income 400,000 – 300,000 = 100,000
,Case 4 Completing an income statement: so many figures!
Present the figures as provided by the controller (see case 3) in an Income Statement according to
USALI.
Income Statement
For the period 2012
Hotel Restaurant Happy Together
Revenu e
Rooms 1,000,000
Food and Beverage 400,000
Total Revenue 1,400,000
Departmental Expenses
Rooms 300,000
Food and Beverage 200,000
Total Departmental Expenses 500,000
Total Departmental Income 900,000
Undistributed Operating Expenses 500,000
. Total Undistributed Expenses 500,000
Gross Operating Profit 400,000
Fixed Charges 300,000
Total Fixed Charges 300,000
Net Operating Income 100,000
Case 5 Business case – Preparing an income statement based on USALI
The Falcon Road Stop Motel provided you the information below related to their operations of the
last 3 months ending at September 30 th 2012. This company has 3 profit centers: rooms, food and
beverage. The management desires to have their end of the quarter income statement established
according to the rules contained in the USALI for external users. The average income tax rate is 32%.
Account
Administration and general expenses 780,000
Advertising 195,000
Beverage department - salaries and wages 260,000
1,300,00
Beverage revenues 0
Cost of beverage sold 390,000
1,170,00
Cost of food sold 0
Depreciation 325,000
1,040,00
Food department - salaries and wages 0
3,510,00
Food revenues 0
Insurance 130,000
Interest expense 552,500
Utility costs 195,000
Property taxes 325,000
6,500,00
Room revenues 0
Room department - salaries and wages 975,000
, Supplies room department 520,000
Supplies beverage department 97,500
Supplies food department 260,000
For the quarter ending at September 31 st 2012
The Falcon Road Stop Motel
Revenu e
Rooms 6,500,000
Food 3,510,000
Beverage 1,300,000
Total Revenue 11,310,000
Departmental Expenses
Rooms – supplies/salaries 1,495,000
Food – cost/supplies/salaries 2,470,000
Beverage – cost/supplies/salaries 747,500
Total Departmental Expenses 4,712,500
Total Departmental Income 6,597,500
Undistributed Operating Expenses
A&G 780,000
Marketing 195,000
Utility costs 195,000
Total Undistributed Expenses 1,170,000
Gross Operating Profit 5,427,500
Fixed Charges
Depreciation 325,000
Insurance 130,000
Interest 552,500
Property taxes 325,000
Total Fixed Charges 1,332,500
Net Operating Income Before Income Taxes 4,095,000
Income Taxes (32%) 1,310,400
NET OPERATING INCOME AFTER TAXES 2,784,600
school year 2015-2016
INCOME STATEMENT
Case 1 What happened to your mix of sales?
Determine the mix of sales for 2010, 2011 and 2012 by taking the type of sales as a % of the total
sales.
Type of Sales 2010 % 2011 % 2012 %
Rooms sales € 400,000 57.1 € 420,000 60.9 € 410,000 63.6
Food sales € 200,000 28.6 € 180,000 26.1 € 150,000 23.3
Beverage sales € 100,000 14.3 € 90,000 13.0 € 85,000 13.2
TOTAL SALES € 700,000 100.0 € 690,000 100.0 € 645,000 100.0
What happened to the mix of sales the last 3 years?
Case 2 Type of costs: operating, overhead or fixed charge?
Determine for the following costs whether it’s an operating cost, overhead expense or a fixed charge.
expense operating overhead fixed charges
Cost of food and beverage sold v
Depreciation v
General manager’s salary v
Marketing costs v
Laundry expenses v
Property fire insurance v
Repair and maintenance v
Rooms division salaries v
Case 3 How profitable is your business?
The controller of hotel-restaurant Happy Together collected the following information for 2012:
Rooms revenues € 1,000,000
Food & Beverage revenues € 400,000
Cost of F&B sales € 100,000
Operating expenses – Rooms € 300,000
Operating expenses – F&B € 200,000
Overhead € 500,000
Fixed charges € 300,000
Calculate the following figures:
Departmental income Rooms 1,000,000 – 300,000 = 700,000
Gross profit F&B 400,000 – 100,000 = 300,000
Departmental income F&B 400,000 – 200,000 = 200,000 (operating exp. incl. costs of f&b )
Gross operating profit (700,000 + 200,000) – 500,000 = 400,000
Overall income 400,000 – 300,000 = 100,000
,Case 4 Completing an income statement: so many figures!
Present the figures as provided by the controller (see case 3) in an Income Statement according to
USALI.
Income Statement
For the period 2012
Hotel Restaurant Happy Together
Revenu e
Rooms 1,000,000
Food and Beverage 400,000
Total Revenue 1,400,000
Departmental Expenses
Rooms 300,000
Food and Beverage 200,000
Total Departmental Expenses 500,000
Total Departmental Income 900,000
Undistributed Operating Expenses 500,000
. Total Undistributed Expenses 500,000
Gross Operating Profit 400,000
Fixed Charges 300,000
Total Fixed Charges 300,000
Net Operating Income 100,000
Case 5 Business case – Preparing an income statement based on USALI
The Falcon Road Stop Motel provided you the information below related to their operations of the
last 3 months ending at September 30 th 2012. This company has 3 profit centers: rooms, food and
beverage. The management desires to have their end of the quarter income statement established
according to the rules contained in the USALI for external users. The average income tax rate is 32%.
Account
Administration and general expenses 780,000
Advertising 195,000
Beverage department - salaries and wages 260,000
1,300,00
Beverage revenues 0
Cost of beverage sold 390,000
1,170,00
Cost of food sold 0
Depreciation 325,000
1,040,00
Food department - salaries and wages 0
3,510,00
Food revenues 0
Insurance 130,000
Interest expense 552,500
Utility costs 195,000
Property taxes 325,000
6,500,00
Room revenues 0
Room department - salaries and wages 975,000
, Supplies room department 520,000
Supplies beverage department 97,500
Supplies food department 260,000
For the quarter ending at September 31 st 2012
The Falcon Road Stop Motel
Revenu e
Rooms 6,500,000
Food 3,510,000
Beverage 1,300,000
Total Revenue 11,310,000
Departmental Expenses
Rooms – supplies/salaries 1,495,000
Food – cost/supplies/salaries 2,470,000
Beverage – cost/supplies/salaries 747,500
Total Departmental Expenses 4,712,500
Total Departmental Income 6,597,500
Undistributed Operating Expenses
A&G 780,000
Marketing 195,000
Utility costs 195,000
Total Undistributed Expenses 1,170,000
Gross Operating Profit 5,427,500
Fixed Charges
Depreciation 325,000
Insurance 130,000
Interest 552,500
Property taxes 325,000
Total Fixed Charges 1,332,500
Net Operating Income Before Income Taxes 4,095,000
Income Taxes (32%) 1,310,400
NET OPERATING INCOME AFTER TAXES 2,784,600
