Expository Essay on Cost Target Confirmation for Hotel

Introduction

The hotel should adopt the batch costing system that enables it to share the cost of services and every batch of guest services is entitled to a specific number. Each room is recognized individually and has customers service which is regarded as cost target. Having the series of a batch which acts as the cost information center, the cost automatically becomes the batch data after sharing all kinds of different information. In conclusion, the cost target of ABC analysis is every dissimilar type of room product.

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Operation Center

The operation center is mandated with collecting all information that is related to every activity and facilitates the control report. By actually looking at different activities in a hotel with involvement with the management, different operation centers, and activity levels are put together in line with the operating features of the operation centers.

Definition of Resources Drivers

Te hotel activities require that most of the activities should be defined carefully, and then the cost collected by the cost center should be allocated to each activity. This means that the total costs of each activity are obtained in order to help the hotel cost management to be aware of the nature of resource utilization of every activity. For this allotment to be carried out correctly, three issues must be taken into account. The first one is the classification of the cost center, cost element for every activity and the cost drivers from processes of operation. All these costs are allocated to every activity in the hotel according to time consumption (Harris & Mongiello, 2012).

Confirm Cost-Sharing Strategy

The split of a cost is the core function of ABC analysis, after all, kinds of information from the four activities are brought together, and the management will be able to determine the activity that needs more resources.

References

Harris, P., & Mongiello, M. (2012). Accounting and Financial Management. Routledge.

Pavlatos, O., & Paggios, I. (2009). Activity-based costing in the hospitality industry: evidence from Greece. Journal of Hospitality & Tourism Research, 33(4), 511-527.