Reference no: EM132842829

Question - The supervisor of housekeeping for a local hotel, was surprised by her summary performance report for January that is shows a high unfavorable variance. The supervisor was disappointed by this performance report. She thought she had done a good job controlling housekeeping labor and towel usage. She had expected a bonus for her good work, but now expected a series of questions from her manager.

The cost budget for housekeeping is based on standard costs. At the beginning of a month, the housekeeping supervisor receives a report from the hotel's sales department outlining the planned room activity for the month. She then schedules labor and purchases using this information. The budget for housekeeping was based on 8,000 room nights

Each room night is budgeted based on the following standards for various materials, labor, and overhead.

Shower supplies 3 bottles at $0.30 each

Towel-replacement 1 towel at $2 each

Laundry 10 pounds at $0.30 pound

Labor 0.5 labor hour at $12 per labor hour

Variable Overhead Applied $6 per labor hour

Fixed Overhead Applied $5 per room night

Actual room nights sold 8,400 rooms

Actual usage: Total actual cost

Shower supplies $8,190 for 26,500 bottles

Towel-replacement $15,563 for 7,900 towels

Laundry $24,000 for 88,500 pounds

Labor $51,591 for 4,350 labor hours

Variable Overhead $25,100

Fixed Overhead $40,300

Required - Prepare flexible budget performance report for the Housekeeping department that compares actual costs and standard allowed based on actual usage.