Midway into the year, actual room sales were significantly below forecasted levels at the Cut & Slash Hotel. This forced the general manager to reduce every department's budget for the est of year by 20%. The food and beverage director would have to reduce food costs by changing menu offerings. The director of sales would have to travel less frequently to meet with prospective clients and meeting planners. Henry, the executive housekeeper, felt that he had very little to do--after all, his department's expenses were tied to a cost per occupied room. Since occupancy levels fell, so should have housekeeping's expenses. Is Henry right or wrong?
- Henry is right because housekeeping's actual labor expenses as well as actual expenses for linen, laundry, and cleaning supplies must already be 20% under budgeted levels.
- Henry is right only if he adjusted staffing levels to conform with actual daily occupancies during the first half of the year.
- Henry is wrong. The general manager said to cut costs by 20%.
- Henry is wrong. He needs to lower his costs per occupied room ratios by 20%.
- The answer is not available.
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