Step-by-step solution file
HTM 223 Online Project - Gross Margin Income Statement Please
Online Project ? Gross Margin Income Statement
Please create an annual income statement in the gross margin format for Lindsay?s Legacy Cottages, a 25-cottage bed and breakfast mini resort located at the Benziger Family Winery. The B&B operates seasonally, so the income statement will be based on their operating revenues and expenses for April thru September (153 days).
There are 5 total sources of revenue and 5 sources of cost of goods sold.
The property?s rack rate is $275 with a yield of 88%. Their occupancy is 90% on average for the time period they are open, and the cost of sales for room revenue is 5% of room revenue.
Information on the various sources of additional revenues is as follows: Food and beverage revenue is calculated using $12 per person avg. guest check for food and $8 per person for beverages based on 2 people per room each occupied room night. (Hint: determine the total number of annual occupied room nights and multiply that by 2 to get the total number of people dining for the year). Cost of sales for food is 40% and for beverages it is 20%.
Wine tasting tours bring in 25% of room revenue (on top of the room revenues ? add it as its own source of revenue )with a 10% cost of sales. Retail wine by the bottle drives another $200,000 annually (on top of room revenue and on top of wine tasting ? add it as another revenue source) with a 20% cost of sales.
Other expenses are salaries at $250,000 and wages at $250,000 per year plus marketing (10% of total sales) and depreciation ($100,000 per year) and other administrative costs running $75,000 per year. One year is just the 153 days, so need to do any sort of pro-rating ? just use these numbers provided.
After you create the income statement, answer these questions:
a) What is ADR
b) What is the overall cost of sales (all cos combined divided by all sales combined) in terms of a percentage?
c) What is the gross margin percentage?
d) If occupancy declined to 80%, what would be the decline in annual room revenues?
e) What is the operating income percentage?
This question was answered on: Feb 21, 2020
This attachment is locked
We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free copy (Deadline assured. Flexible pricing. TurnItIn Report provided)
Need a similar solution fast, written anew from scratch? Place your own custom order
We have top-notch tutors who can help you with your essay at a reasonable cost and then you can simply use that essay as a template to build your own arguments. This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student. New solution orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.