Variance Analysis

Topics: Variance, Wage, Minimum wage Pages: 2 (430 words) Published: April 14, 2015
Ace Armendez | 2010-13706

HRIM 115 Assignment No. 8 on Variance Analysis

1) Holiday Hotel budgeted 1,000 room sales for the week ended September 10. The estimated average price per room was $28.50. The actual average price per room was 20% greater than anticipated, while room sales in units were 10% less than forecasted. a) Required : Compute and analyze the Room Revenue variance as discussed in class. Give 2 possible causes for the revenue variance (i.e. Why was actual price greater than budgeted price or vice versa; Why was actual quantity greater than budgeted quantity or vice versa) Cite hypothetical scenarios.

For the same week, Holly’s Hotel’s head housekeeper, based on the work standard, budgeted 500 hours for room attendants to clean the rooms sold. The actual hours worked totaled 460. The budgeted average wage rate for the attendants is $4.00. The actual wages paid totaled $ 2,200. b) Required : Compute and analyze the cost/expense variance. Give 2 possible causes for the cost/exp variance (i.e. Why was actual cost greater than budgeted cost or vice versa; Why was actual quantity greater than budgeted quantity or vice versa). Cite hypothetical scenarios.

2) Josephine’s Restaurant is a fancy restaurant operating close to a 5-star hotel. The following data are information on average food costs per unit per menu type plus unit selling prices on some of their menu items. The cost data and the actual results are detailed below:

Budget DataCost Price($)Selling Price($)Portions
Seafood Alfredo1.153.80 2300
Vegetable Lasagna1.604.20 2500

Actual Data
Seafood Alfredo1.303.90 2400
Vegetable Lasagna1.404.00 2320

You have been asked to prepare variance analysis report (for sales and costs) explaining and reconciling the change in the gross profit.

3. Harry Brook, the Happy Hotel’s accountant, has just finished the hotel’s monthly...
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