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The Galt Hospitality Group has a hotel, dining room and conference centre facility. Financial information is as follows:
Hotel Dining Room Conference Centre
Capacity 120 rooms 150 seats 230 seats
Selling price/unit $190 $40 $180
Material costs/unit $47 (laundry) $22 (food) $20 (refreshments)
Other variable costs/unit $20 (cleaning) $13 (labour) $12 (light and heat)
Required:
Problem a) Prepare a budget that shows the total contribution margin for each of the three facilities.
Problem b) Rank the facilities based on the greatest contribution to profitability.
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