Use the following information to answer the next two questions. The Sydney Harbour Bridge View Hotel predicted $30,000 in variable housekeeping costs and room revenue of $240,000 from 3,000 room sales in its static budget for March. The hotel actually sold 3,300 rooms and incurred $32,000 in variable housekeeping costs in March.
-What would be recorded in the Sydney Harbour Bridge View Hotel's flexible budget for variable housekeeping costs in March?

Question

Quizplus · Accepted Answer

The flexible budget adjusts the budgeted costs and revenues based on the actual level of activity achieved. In this case, the hotel actually sold 3,300 rooms instead of the budgeted 3,000 rooms. Therefore, the flexible budget for variable housekeeping costs would be $30,000 (budgeted variable cost for 3,000 room sales) + ($2,000 variable cost for additional 300 room sales) = $33,000.

Use the Following Information to Answer the Next Two Questions