Page 18 - DCOM206_COST_ACCOUNTING_II

Unit 1: Service Costing

Operating Cost Sheet of Vikas Hotel for the Year…………… Notes
Particulars Amount (`)
(A) Fixed Charges:
Staff salaries
Wages for attendants
Repairs
Depreciation
Interest on investment
Interior decoration
Rent of premises
Administrative expenses
Linen
Total
(B) Variable Charges:

Lighting and heating

Power

Sundries

Total
(C) Total Operating Cost (A +B)
(D) Total Room Days
(E) Rent per room day = Total Operating Cost ÷Total Room Days

Problem 5:
Following are the information given by an owner of Udai Hotel. You are required to advise him
what rent should be charged from the customers per day, so that he is able to earn 25% on cost
other than interest:
Managerial staff salaries ` 1,80,000 p.a.
Repairs to building ` 10,000 p.a.
Cost of building ` 4,00,000

Rate of depreciation 5% p.a.
Room attendant’s salary ` 2 per day. The salary is paid on daily basis and services of room
attendants are needed only when the room is occupied. There is one room for one attendant.

Lighting, heating and power charges: The normal lighting expenses for a room if it is occupied
for the whole month is ` 50 per room. Power is used in winter only and normal charges are
` 20 p.m. for a room, if room is occupied.
Equipments ` 1,00,000
Rate of depreciation 10%
Internal decoration ` 20,000 p.a.

Interest @ 5% may be charged on its investment of ` 5,00,000 in the building and equipment.
Linen ` 14,800 p.a.
Sundries ` 16,600 p.a.
There are 100 rooms in the hotel and 80% of the rooms are normally occupied in summer and
30% of the rooms are occupied in winter. You may assume that period of summer and winter is
six months each. Normal days in a month may be assumed to be 30.

LOVELY PROFESSIONAL UNIVERSITY 13