How to count Cost and Profit of one massage treatment?

[Baby Blue]

Hi, I have this task from my Manager, who ask me, what is the cost and the profit of one hour massage in our hotels ( the Spa belong to the hotels itself) it cost US$95.00 per hour. Please anyone can help on how to count it? We use our aroma oil for massage only that, bed sheet, and towels...that being used too. Sorry about the spelling, and Thank you for your help.

 

[Sabeena]

That's a very complicated task! People get college degrees in cost accounting to learn how to do these kind of things. Your manager needs to give this task to an accountant who works for the hotel. They know how to estimate costs and profits.

You need to know how much the hotel spends everything such as equipment, supplies, linens, salary. Then you have to estimate how long each thing lasts, and decide how much to allocate as a cost to each massage. To estimate real costs you also have to deduct overhead expenses such as insurance, management salary, and electricity. Costing is a complicated process.

I have done this for my own business. My cost is $7.50 per massage. I charge $60 for a massage, so my profit is $52.50. I've never done costing for a hotel, so I don't know if your expenses are similar to mine or not!