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

An auditor reviewing a hotel's cost records finds that room cost per occupied room-day was computed at ₹1,200 using total room costs of ₹36,00,000 and 3,000 occupied room-days. The hotel has 20 rooms and operated for 180 days in the period. What is the occupancy percentage and is the computed cost per room-day arithmetically consistent?

Occupancy is 83.3% because 3,000 occupied room-days out of 3,600 available room-days were sold. Cost per occupied room-day is ₹36,00,000 divided by 3,000, which is ₹1,200, so the figure is consistent with the data.

  1. AOccupancy 83.3%; cost per room-day should be ₹1,200, so consistentCorrect
  2. BOccupancy 83.3%; cost per room-day should be ₹1,000, so inconsistent
  3. COccupancy 100%; cost per room-day should be ₹1,000
  4. DOccupancy 16.7%; cost per room-day should be ₹1,200

Explanation

Available room-days = 20 x 180 = 3,600. Occupancy = 3,000/3,600 = 83.3%. Cost per occupied room-day = 36,00,000/3,000 = ₹1,200, so the figure is consistent. Using available room-days would give ₹1,000, which is the wrong base.

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