Static Budget and Flexible budget: Static Budget is prepared on the basis of the expected level of output or production. The static budget shows the budgeted costs are revenue at an expected level of activity. The Flexible budget is prepared using the static budget. The Flexible budget is prepared to take the actual level of output or production as a basis. To Indicate: The comment on occupancy rates for the first company

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Print Item Question Content Area Utilization Rate Stop-N-Stay and Paradise Inn operate motels across the northwest. Operating data for each chain are as follows: Hotels Rooms per Hotel Total Rooms Stop-N-Stay 50 180 9,000 Paradise Inn 60 175 10,500 For August, each chain reported the following: Room Nights Occupied Average Daily Room Rate Stop-N-Stay 239,940 $125 Paradise Inn 292,950 $ 95 1. Determine the occupancy rate for Stop-N-Stay for August. fill in the blank 1 % 2. Determine the occupancy rate for Paradise Inn for August. fill in the blank 2 % 3. Determine the total room revenue for each chain for August. Stop-N-Stay $fill in the blank 3 Paradise Inn $fill in the blank 4 4. Compare and comment on the operating results for each chain. a higher occupancy rate. has a higher average daily room rate. higher daily room rate offsets the effects of the lower occupancy rate

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Chapter 13, Problem 13.3.1MBA

To determine

Concept Introduction:

Static Budget and Flexible budget:

Static Budget is prepared on the basis of the expected level of output or production. The static budget shows the budgeted costs are revenue at an expected level of activity. The Flexible budget is prepared using the static budget. The Flexible budget is prepared to take the actual level of output or production as a basis.

To Indicate:

The comment on occupancy rates for the first company

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Print Item Question Content Area Utilization Rate Stop-N-Stay and Paradise Inn operate motels across the northwest. Operating data for each chain are as follows: Hotels Rooms per Hotel Total Rooms Stop-N-Stay 50 180 9,000 Paradise Inn 60 175 10,500 For August, each chain reported the following: Room Nights Occupied Average Daily Room Rate Stop-N-Stay 239,940 $125 Paradise Inn 292,950 $ 95 1. Determine the occupancy rate for Stop-N-Stay for August. fill in the blank 1 % 2. Determine the occupancy rate for Paradise Inn for August. fill in the blank 2 % 3. Determine the total room revenue for each chain for August. Stop-N-Stay $fill in the blank 3 Paradise Inn $fill in the blank 4 4. Compare and comment on the operating results for each chain. a higher occupancy rate. has a higher average daily room rate. higher daily room rate offsets the effects of the lower occupancy rate

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