The Blue Ridge Hotel uses the simplest time series approach for forecasting mont

Question

The Blue Ridge Hotel uses the simplest time series approach for forecasting monthly revenues. The current year’s revenues by department are multiplied by 1 + x percent to forecast the next year’s revenues. The current year’s department revenues for January and percentage increases for the coming year are provided below.

Calculate monthly forecasted revenues by department below.

Department

2018 Revenues

Percentage Increase

2019 Forecasted Revenues

Rooms

$192,000

5%

Food

45,500

3%

Beverages

18,200

4%

Telecommuting

9,400

2%

Department

2018 Revenues

Percentage Increase

2019 Forecasted Revenues

Rooms

$192,000

5%

Food

45,500

3%

Beverages

18,200

4%

Telecommuting

9,400

2%

Explanation / Answer

Department

2018 Revenues

Percentage Increase

2019 Forecasted Revenues

Rooms

$192,000

5%

$192,000 x 105% = $201,600

Food

45,500

3%

45,500 x 103% = $46,865

Beverages

18,200

4%

18,200 x 104% = $18,928

Telecommuting

9,400

2%

9,400 x 102% = $9,588

Department

2018 Revenues

Percentage Increase

2019 Forecasted Revenues

Rooms

$192,000

5%

$192,000 x 105% = $201,600

Food

45,500

3%

45,500 x 103% = $46,865

Beverages

18,200

4%

18,200 x 104% = $18,928

Telecommuting

9,400

2%

9,400 x 102% = $9,588

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