Ambassador Suites Inc. operates a downtown hotel property that has 300 rooms. On average, 80% of Ambassador Suites' rooms are occupied on weekdays, and 40% are occupied during the weekend. The manager has asked you to develop a 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 $14 per hour. The housekeeping labor cost is fully variable to the number of occupied rooms. The restaurant has six full-time staff on duty to staff the restaurant for breakfast and lunch (eight hours), regardless of occupancy. However, for every 60 occupied rooms, an additional person is brought in to work in the restaurant for breakfast and lunch (eight hours). The restaurant staff is paid $12 per hour. Prepare two columns, labeled as weekday and weekend day.

A. Determine the number of rooms occupied for an average weekday and weekend day.
B. Determine the housekeeping staff budget for an average weekday and weekend day
C. Determine the restaurant staff budget for an average weekday and weekend day.
D. Determine the total staff budget for an average weekday and weekend day

Answer and Explanation:

The computation is shown below:

Given that

Particulars  Weekday     Weekend  

Rooms Available              300                300  

% of rooms occupied       80%              40%  

a The number of rooms occupied is

Particulars  Weekday     Weekend  

Rooms Available              300                300  

% of rooms occupied       80%              40%  

Rooms Occupied               240                  120  

Time taken to clean room    0.5           0.5

                                   (30 minutes ÷ 60 minutes)      (30 minutes ÷ 60 minutes)  

Total Time taken by housekeeping Staff12060  

Rate per hour                        14                    14  

b Now the the housekeeping staff budget is

Particulars  Weekday     Weekend  

Total cost of housekeeping staff$1,680$840

                                          (120 × $14)          (60 × $14)  

Staff Available                         6                      6  

Additional Staff                       4                       2  

Total Staff                              10                       8  

Hours worked                        8                        8  

Total Hours worked              80                     64  

Rate per hour for staff           12                 12  

c Now the total cost of Restaurant Staff is

Particulars  Weekday     Weekend  

Total cost                        $960                   $768

                                     (80 × $12)    (64 × $12)

d And, the total staff cost is  

Particulars  Weekday     Weekend  

Total staff cost                $2,640               $1,608

                                ($1,680 + $960)     ($840 + $768)

Working note

Additional Staff    

StaffRoom  StaffRoom  

1          60               1            60  

                240            120  

240 ÷ 60 =  4  120 ÷ 60= 2

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