HRT 374 Lecture Notes - Lecture 10: Business Travel, Profit Maximization, Capital Expenditure

• School: Cal Poly Pomona
• Department: Hospitality Management
• Course: HRT 374
• Professor: John Self

Document Summary

Cash budget- how can you afford to pay the bills. Budgeting horizons:- how far you look into the buget. Divided into monthly (31 days, 29 days, days) Variance= difference between the budget and reality. Always find alternatives, but examine alternatives before deciding. Plans can change, but you gotta have a plan. Financial objectives- make the most profit, quality service= increase sales, (ceo get paid by the stock, so their job could be to jack up the price) Revenue forecasts- managers needs to be able to forecast revenue for their departments, and provided information. Requires all expenses to be justified, all budgeted amount including payroll costs, advertising, have to show yield greater benefit than their cost. Budgeted sales x (actual price- budged price) Budged price x ( actual volume - budgeted volume) Price variance= 400 x (18-20)= 400 x -2= -. Use bottom- up approach- starts with unit manager. Use top- down approach- less take this approach.