SST COLLEGE OF ARTS AND

COMMERCE
SUB: COST ACCOUNTING-III
TOPIC: HOTEL COSTING
ROLL NO: 20071
PRESENTED BY: SHWETA GAWDE.
PRESENTED TO: PRO. ANIL
TELINGE
Hotel industry is a service industry and covers various activities as
provision for food and accommodation and providing other comforts
like recreation business facilities, shopping areas for shopping facilities.
 Expenses
• In order to provide service, hotel industry is required to incur various
expenses.
• Expenses may be fixed or variable.

Fixed expenses includes Variable expenses includes

Staff salaries Lighting charges
Repairs and renovation Attendant salaries
Interior decoration Power charges
Depreciation on fixed assets
Important heads of expenditure in hotel costing

• Provisions: vegetables, fruits, meat, flour, milk, oil, sugar.

• Labour: salary of cooks, kitchen assistance, supervision.
• Service: steams, gas, electricity, power and light.
• Consumables stores: crockery, glassware.
• Miscellaneous overheads: rent, rate, depreciation, insurance.
• Credit: charges of meals, tea and other sales.
 Room rent

• In order to calculate the room rent to be charged per person,

national profit is added in the total service cost and divided by
the number of rooms available.
• The number of rooms available are calculated after taking
into consideration:
1. Various categories of suit
2. Various seasons
3. Occupancy percentage
 Cost centers

Hotel, restaurants employ service costing. The total

operation of a hotel is divided into number of cost centers.

• Restaurants: Cost unit is number meals served.

• Housekeeping: Cost unit is number of rooms cleaned.
• Laundry: Cost unit is number of clothes washed.
Steps Costs Amount Amount
Salaries to staff XX
Room attendant wages XX
Repairs and renovation XX
Lighting and heating XX
Power XX
Linen ` XX
Interior decoration XX
Sundries XX
Depreciation
-building XX
-furniture and fixture XX
-air conditioners XX XX
Premises rent XX
Other administration expenses XX
Interest on investment XX
TOTAL OPERATION COST(i) XX
NO. OF ROOM DAYS (ii) XX
COST PER ROOM DAY (i)+(ii) XXX