acc-Phelps Glass Inc. and Hotel Industry Kristin Helmud is the general manager of Highland Inn

First question 18-22:Phelps Glass Inc. has reported the following financial data: net revenues of $10 million, variable costs of $5 million, controllable fixed costs of $2 million, non-controllable fixed costs of $1 million, and untraceable costs of $500,000. The accounting manager has supplied you with these data and asked you to come up with the controllable margin, total contribution, CPC, and operating income. Second question 20-37:Incentive Pay in the Hotel Industry Kristin Helmud is the general manager of Highland Inn, a local mid-priced hotel with 100 rooms. Her job objectives include providing resourceful and friendly service to the hotel’s guests, maintaining an 80% occupancy rate, improving the average rate received per room to $88 from the current $85, achieving a savings of 5% on all hotel costs, and reducing energy use by 10% by carefully managing the use of heating and air conditioning in unused rooms and by carefully managing the onsite laundry facility, among other means. The hotel’s owner, a partnership of seven people who own several hotels in the region, want to structure Kristin’s future compensation to objectively reward her for achieving these goals. In the past, she has been paid an annual salary of $72,000 with no incentive pay. The incentive plan the partners developed has each of the goals weighted as follows:Measure Percent of Total ResponsibilityOccupancy rate (also reflects guest service quality) 20%Operating within 95% of expense budget 30%Average room rate 30%Energy use 20%100%If Kristin achieves all of these goals, the partners determine that her performance should merit a bonus of $30,000. The partners also agree that her salary will need to be reduced to $60,000 because of the addition of the bonus. The goal measures used to compensate Kristin are as follows:Occupancy goal: 29,200 room-nights 5 80% occupancy rate 3 100 rooms 3 365 daysCompensation: 20% weight 3 $30,000 target reward 5 $6,000$6,000 4 29,200 5 $0.2055 per room-nightExpense goal: 5% savingsCompensation: 30% weight 3 $30,000 target reward 5 $9,000$9,000 4 5 5 $1,800 for each percentage point savedRoom rate goal: $3 rate increaseCompensation: 30% weight 3 $30,000 target reward 5 $9,000$9,000 4 300 5 $30.00 for each cent increaseEnergy use goal: 10% savingsCompensation: 20% weight 3 $30,000 target reward 5 $6,000$6,000 4 10 5 $600 for each percentage point savedKristin’s new compensation plan will thus pay her a $60,000 salary plus 20.55 cents per room-night sold plus $1,800 for each percentage point saved in the expense budget plus $30 for each cent increase in average room rate plus $600 for each percentage point saved in energy use. The minimum potential compensation would be $60,000 and the maximum potential compensation for Kristin would be $60,000 1 $30,000 5 $90,000. Questions Required 1. Based on this plan, what will Kristin’s total compensation be if her performance results area. 30,000 room-nights, 5% saved, $3.00 rate increase, and 8% reduction in energy use? b. 25,000 room-nights, 3% saved, $1.15 rate increase, and 5% reduction in energy use? c. 28,000 room-nights, 0% saved, $1.00 rate increase, and 2% reduction in energy use? 2. Comment on the expected effectiveness of this plan. In what way, if at all, would you change the compensation weights?

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