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please prepare the operation budget for 2020 based on the information given

Number of rooms 240 2019 2020 Budget ADR 320 IstanBlue Hotel is a 240-room property with food and beverage operations. ADR is expected to be $340 and the occupancy rate to be 84% in 2020. F &B OCC department's revenues are expected to increase by 7%. Other Operated Departments revenues are expected to increase by 5%. Miscellaneous Income of 80% $135,000 is expected in 2020. RevPAR 256 The expected changes to the some of the expenses are as follows: REVENUE Rooms $ 22,425,600 The owners are planning to expand the hotel by adding 20 suites. The plan will increase the rooms revenues by $6,400,000 and increase the F &B revenues by Food & Beverage 6.240,000 5-percents in 2021. The suites will increase the fixed part of Marketing expenses by $80,000, interest expense by $60,000, and the depreciation expense by Other Operated Departments 480,500 $50,000 in 2020. Miscellaneous Income 40,000 A new position for assistant GM is projected to be open and filled by February 1, 2020. The posted salary for the position is $61,200. TOTAL REVENUE $ 29,186,100 Cost Behavior: DEPARTMENTAL EXPENSES Rooms $ 5,157,888 > Room, Food & Beverage, and other operated departments expenses are directly variable with respective sales revenues. Food & Beverage $ 3,868,800 > Administrative and general: 3,000,000 is fixed (same as 2019 but consider the new salary), the remainder is variable with total revenue. 120,125 > Marketing: $900,000 is fixed, the remainder is variable with total revenue. Other Operated Departments >Utilities cost: $127,000 fixed, the remainder is variable with total revenue. TOTAL DEPARTMENTAL EXPENSES 9,146,813 > Property Operations & Maintenance: $150,000 is fixed, the remainder is variable with total revenue. Franchise fees: 5% of the Room's Revenue. TOTAL DEPARTMENTAL PROFITS $ 20,039 287 >Management fees: 6% of the GOP. > The property taxes and insurance expenses are same as 2019. UNDISTRIBUTED OPERATING EXPENSES > Capital Reserve: 1.8% of the GOP. Administrative & General 4,669,776 >Depreciation and interest expense are fixed (same as 2019 plus the new depreciation and interest expenses as noted above). The income tax rate is 25% Marketing 2,918.610 Utility Costs 291,861 Based on given information above and the previous year's income statements, prepare the operation budget for the year 2020. Property Operation & Maintenance 350,233 TOTAL UNDISTRIBUTED OPERATING EXPENSES 8,230,480 GROSS OPERATING PROFIT $ 11,808,807 Franchise Fees 897,024 Management Fees 708.528 INCOME BEFORE FIXED CHARGES $ 10,203,254 SELECTED FIXED CHARGES Property Taxes 420,000 Insurance 62,000 Reserve For Capital Replacement 180,000 EBITDA 9,541.254 Depreciation 236,000 Interest Expense 20,000 Income Before Income Tax 9.285,254 Income Tax 2,321,314 Net Income 6.963,941

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