Dorquary Hotel: Budgeting, Occupancy, and Profit Analysis Project

This project report provides a comprehensive financial analysis of the Dorquary Hotel and Chloe Enterprises, covering budgeting, occupancy rates, cost analysis, and marketing strategies. Part A focuses on calculating budgeted room revenue for the Dorquary Hotel over three months, considering room availability, occupancy rates, and room rates. Part B analyzes a salesperson's influence and the advantages and disadvantages of an employee code of conduct. Part C delves into Chloe Enterprises, calculating the break-even point, margin of safety, total profit, and the required sales units to achieve a desired profit, along with proposed marketing strategies. The report includes detailed calculations and references to support the findings, offering valuable insights for financial decision-making and strategic planning.

RUNNING HEAD: Accounting and decision making 1
Project Report: Accounting and decision making

Accounting and decision making 2
Part-A
Question 9.45 on the Dorquary Hotel
Computation of the budgeted room revenue for three months
Budget-
Budgets are the calculations which are done by the organizations to analyze and evaluate the
revenue and expenses of the company. In this case, budgeting reports have been prepared to
analyze the total revenue of the company in next 3 months. The below given tables depict
about the total revenue of the Dorquary hotel of January, February and March. Following are
details of the rooms availability, occupancy and the rate:
Rooms Available 20
Rooms rate 180
Rooms occupancy 90%
In Jan,
Rooms rate 180+10%
Rooms occupancy 95%
In Feb,

Accounting and decision making 3
Rooms rate 180+10%
Rooms occupancy 85%
Above given information depict about the future predictionabout the occupancy of the
hotel rooms, rates in next 3 months and the availability of the rooms.
Following are the calculations of the budgeted room revenue:
Computation of budgeted room revenue
Statement of budgeted room revenue
Dec Jan Feb
Rooms available 20 20 20
Rooms occupancy 90% 95% 85%
Total used rooms (Rooms
available * rooms occupancy) 18 19 17
Room rate 180 198 198

Accounting and decision making 4
Room revenue (total used room *
rooms rate) 3240 3762 3366
Question 9.45 on the Dorquary Hotel (2)
Determination of occupancy rate
In this case, it has been analyzed that the Dorquary Hotel’s occupancy rate has been
determined according to the holiday season and various other external sources and factors
such as government policy, competition etc. further, it has been analyzed that the
management of the company has enhanced its revenue in the holiday season. It has been
evaluated that it becomes easy for the company to enhance the revenue in the peak season
through enhancing the rates of the room. The peak season of the company is in December and
January in which the occupancy rate of the rooms of the company has been enhanced.
Ideally, it has been found that the company must look over the factors and season before
making a decision about the performance and the position of the company.
Following are some of the factors which must also be analyzed by the management of the
company to make a better decision:
 Holiday season
 Tourism policies
 New rules and technology implementation
 New events in the area where it is situated
 Core competencies
 New services

Accounting and decision making 5
 Brand image
 Client oriented programmes
 Strategic alliances
 Cyber computing system

Accounting and decision making 6
Part-B
Question 2.572
Answer to question no-1
Through analyzing and evaluating all the related facts of this case, it has been
observed that Anitah loh is a salesperson and being a professional, he has given a profitable
offer to Smith to authority his selection of choice to acquire software packages for the
company. Though, the offer which has been given by Anitah Loh to Smith is influencing
(Bardach & Patashnik, 2015).
According to this case, it has been observed that Smith must not acquire this offer.
Smith is suggested to go and check the software by himself rather than taking teh help of
Anitah Loh. This would assist Mr. Smith to maintain the position where he might separately
study whether these software packages must be bought by the company for preparing the
reports of the budgeting.
Answer to question no-2
Following are the advantages and disadvantages of having employee code of conduct in the
company, Practical Solutions Ltd (Brigham & Ehrhardt, 2013).
Advantage Disadvantage
It would enhance the regulatory observance
of the company.
It would assist the company to manage high
Managing the code of conduct would
enhance the complexity in business.
It would enhance the formal regulatory

Accounting and decision making 7
ethical compliance.
It would assist the company to accept
employees oriented organization culture and
standard code of conduct.
It would assist employees to analyze the limit
while performing task in company.
If the company would use the proper code of
conduct than it would enhance the
performance and transparency into the
business.
In the company, entire workmen oriented
policies and regulatory observance would be
kept by the company at the most priority.
observance and production cost of company.
It would enhance the employee turnover.
This would destruct the balance score card
and would offer less efficient indicators to
the company.

Accounting and decision making 8
Part-C
Question- 10.32
In this paper, Chloe enterprises has been evaluated. It is an organization which produces
single product. Various financial and costing methods have been applied over this company
to make a better result (Frias, Rodríguez & Garcia, 2014).
Answer to question-(a)
Break-even point calculation:
The breakeven level of the company has been analyzed in this case, following are the details
of the breakeven units and the sales dollars.
a) Calculation of breakeven point
Per unit Total
Selling price
$
60 $ 21,00,000
Less:
Variable cost
$
40 $ 14,00,000

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Contribution
(Sales - variable
cost)
$
20 $ 7,00,000
Fixed cost
$
4,90,000
Break-even
point (Fixed cost
/ contribution) 24500 $ 14,70,000
The above calculations depict that the breakeven level of the company is 24500 units and in
terms of dollars, it is $ 14,70,000. To reach over a point where the profit of the company is 0,
it is required to sell at least 24500 units.

Accounting and decision making 10
Answer to question- 2B
Margin of dollar calculations
The margin of dollar of the company has been analyzed in this case, following are the
details of the Maargin of dollars units and the sales dollars
B) Calculation of Margin of safety
In units In dollars
Margin of safety
(Sales -
breakeven point) 10500 $ 6,30,000
The above calculations depict that the margin of safety level of the company is 10,500 units
and in terms of dollars, it is $ 6,30,000. Margin of safety is the point where the company
would make the profits (Vardon, Birt & Ingram, 2017). To reach over a point where the
company would start to make the profits, it is required to sell at least 10500 units.
Answer to question- 3c
Total profit of company
Profit is the total revenue less cost of the company. This amount is earned by the
company to manage its activities. The calculations of the profit of the company have been

Accounting and decision making 11
analyzed if the company would sell around 32000 units per month (Christensen & Kent,
2016).
C) Calculation of total profit
Per unit Total
Total sales
$
60
$
19,20,000
Less: Variable cost
$
40
$
12,80,000
Less: Fixed cost
$
4,90,000
Profit (total sales -
fixed cost -
variable cost)
$
1,50,000
According to the above calculations, it has been found that if the comapny would sell
32000 units than the total profit of the company would be $ 1,50,000.

Accounting and decision making 12
Answer to question-4d
Marketing strategy
Further, the company has planned some marketing strategies and implemented it to
reduce the level of the cost and enhance the level of the sales.
D) Calculation of sales unit on the basis of
desired profit
Per unit Total
Selling price
$
60
$
21,00,000
Less:
Variable cost
$
44
$
15,40,000
Contribution
(Sales - variable
cost)
$
16
$
5,60,000
Fixed cost $

Accounting and decision making 13
4,10,000
BEP 24500 1470000
Desired Profit
$
1,50,000
Sales units to
achieve the desired
profit (Desired
profit /
contribution +
sales units) 33875
$
20,32,500
Through the above evaluation, it has been found that the various changes have taken
place into the performance and the position of the sales and the profit of the company. In this
situation, the company must sell 33875 units to reach over the level of the profit (Brigham&
Ehrhardt, 2013).
According to this evaluation, it has been found that the proposed changes must be
accepted by the company as it would offer more returns to the company in less efforts.