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The Luxury Hotels Ltd is used for conference bookings and private bookings. The conference bookings include bookings for rooms each week while the remaining rooms are used for private guest bookings.Additional information:1. Variable cost of accommodating each guest is Sh. 1,7502. Variable cost per week per room available is Sh. 5,6003. The general fixed cost for private bookings per week is Sh. 8,1004. The hotel charges Sh. 3,000 per person per night for accommodation for private guest bookings.5. The hotel has been experiencing a high rate of staff turnover over the last 12 months.6. Some of the costs for private guest bookings vary with the number of guests, regardless of thelength of their stay, while others vary with the number of rooms available in any week.Required:a) Total cost per guest per night for private guest bookings over the ten week periodb) Contribution and profit for private guest bookings for the ten week periodc) Highlight four possible reasons for the high rate of staff turnover in the hotel
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Fair Price Limited produces a single product "Zed': The store‟s manager has provided thefollowing information relating to the month of August 2010:
Date posted: February 15, 2019 . Answers (1)
Distinguish between the following terminologies as used in cost accounting:i) Relevant range and relevant costs.ii) Opportunity costs and discretionary costs.iii) By-products and joint products.
Distinguish between 'committed fixed costs' and 'discretionary fixed costs'.
Explain the meaning of the following term in the context of cost accounting:- Cost centre.
Understanding of cost behavior patterns is important in making financial planning and costcontrol decisions.Required:In relation to the above statement, describe three ways in which costs might be classifiedaccording to behavior.
Afya Bora Health Centre has a capacity of 20 beds. The following information relates to thecentre's operations for the year ended 30 June 2014:
Cost accounting is often described as the provision of information required by management forspecific purposes'Required:State six of these specific purposes.
Daniel Mutiso, the Cost Accountant of Abra Ltd. feels that he is getting overworked and hasrecommended that a management accountant be employed to take up other responsibilities in theorganization.However, the management of the company equally argues that the work is the same and that adecision to hire a management accountant is against their cost reduction policy.Required:In the light of the above statement, explain to the management three differences between managementaccounting and cost accounting to help them make a fair decision.
Describe five ways in which cost accounting complements financial accounting in terms ofproviding information to managers for better decision making.
The success of an organisation in cost control and cost reduction depends largely on theinstallation of an ideal cost accounting system which identifies, classifies and records all costsaccurately and promptly.Required;With reference to the above statement, explain four conditions for an effective costing system.