Executive Inn, Inc., operates a downtown hotel property that has 200 rooms. On average, 90% of Executive Inn’s rooms are occupied on weekdays, and 60% are occupied during the weekend. The manager has asked yow to develop a direct labor budget for the house-keeping and restaurant staff for weekdays and weekends. You have determined that the housekeeping staff requires 30 minutes to clean each occupied room. The housekeeping staff is paid $12 per hour. The restaurant has six full-time staff (eight-hour day) on duty, regardless of occupancy. However, for every 60 occupied rooms, an additional person is brought in to work in the restaurant for the eight-hour day. The restaurant staff is paid $10 per hour.
Determine the estimate housekeeping, restaurant, and total direct labor cost for an average weekday and average weekend day. Format the budget in two columns, labeled as weekday and weekend day.

A

B

C

1

EXECUTIVE INN, INC.

2

Direct Labor Cost Budget

3

For a Weekday or a Weekend Day

4

Weekday

Weekend Day

5

       Room occupancy

6

       Room capacity    

            200

            200

7

       Occupied percent (occupancy)   

      ×   90%

      ×   60%

8

 (a)  Rooms occupied 

            180

            120

9

       Housekeeping

10

 (b)  Number of minutes to clean a room       

      ×      30

      ×      30

11

       Total minutes [(a) × (b)]  

         5,400

         3,600

12

       Total hours (Total minutes/60 min.)        

              90

              60

13

       Labor rate per hour         

      × $12.00

      × $12.00

14

 (c)  Housekeeping daily labor budget           

      $ 1,080

      $    720

15

       Restaurant staff

16

       Base restaurant staff       

                6

                6

17

       Incremental 60 room blocks [(a)/60]       

      +        3

      +        2

18

       Total staff           

                9

                8

19

       Hours per day

      ×        8

      ×        8

20

       Total hours          

              72

              64

21

       Labor rate per hour         

      × $10.00

      ×$10.00

22

 (d)  Restaurant staff daily labor budget        

      $    720

      $    640

23

       Total daily labor budget [(c) + (d)]         

      $ 1,800

      $ 1,360