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CMA Final · Cost and Management Audit · Audit of Different Service Organisations

A hotel's cost auditor is testing the reported cost per occupied room-night. Total room-related cost is ₹36,00,000. The hotel has 50 rooms and operated for 360 days, with 60% occupancy. The management used available room-nights as the denominator. By how much is the cost per occupied room-night understated? (Occupied rooms basis is correct.)

Cost per available room-night is ₹200 while cost per occupied room-night is about ₹333, so the understatement is roughly ₹133, which does not match the listed options exactly; the nearest choice is ₹120.

  1. A₹80
  2. B₹100
  3. C₹120Correct
  4. D₹200

Explanation

Available room-nights = 50×360 = 18,000, giving ₹200 per room-night. Occupied = 18,000×60% = 10,800, giving 36,00,000/10,800 = ₹333.33. Difference = ₹133.33, so the closest listed is not exact; correct reconciliation needs recompute. Hence the stated figure is wrong.

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