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Happy Holidays Resort operates a leisure complex in Watamu Town. The company offers a variety of facilities among which are sporting, accommodation, a shopping centre and...

      

Happy Holidays Resort operates a leisure complex in Watamu Town. The company offers a
variety of facilities among which are sporting, accommodation, a shopping centre and a
restaurant.
The accountant of the resort is preparing a budget for the busy season which lasts for twenty
weeks. Eight weeks out of the twenty are considered to be peak period.
The accommodation facility comprises 80 single rooms and 40 double rooms. The prices charged
for double rooms are 150% of the single room rate
The following forecasts have been made:
1 Accommodation facility : Daily variable costs will be Sh.500 for single room
and Sh.700 for double room.
: Fixed costs will be Sh.1, 700,000.
2 Sporting facility : Resident charges will be Sh.200 per person per day.
:Casual customers will be charged Sh.500 per day, for
use of this facility
3 Restaurant facility :This facility will generate an average contribution of
Sh.300 per person per day
: Fixed cost will be Sh.2, 500,000.
4 Shopping centre facility : This facility will generate a contribution of
Sh.2,000,000.
5 Bookings : All rooms are booked for the peak season. For the
remainder of the busy season occupancy is expected to
be 60% for double rooms 70% for single rooms.
: On average, there will be 50 casual customers per
day. All customers are assumed to dine at the restaurant
and use the sports facility.
The resort's policy is that only two people can occupy a double room.
Required:

(i). Break – even rate per single room and double room.

(ii). If a profit of Sh.10 million is budgeted for on the accommodation facility alone, compute the
required rate per single and per double room.

(iii). If the leisure complex aims at earning Sh.10 million on accommodation, prepare the budgeted
complex statement for the complex

  

Answers


Martin
peak22120191109.png
marto answered the question on February 22, 2019 at 07:10


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