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Chapter 6What Makes Costs Move

Explain cost movement through workload, price, mix, productivity or usage, control, and timing before deciding what should change.

By Manish Gupta, CA · eHMS Press · Updated Aug 28, 2026

Questions this chapter helps answer

Why did a hotel cost increase: more business, higher prices, different mix, lower productivity, greater usage, weak control, or timing?
How should fixed, variable, step, shared, controllable, and exceptional costs be interpreted before management acts?
Which operating drivers should be matched to hotel costs before deciding that a cost is too high?

Key concepts

cost drivers
variable cost
fixed cost
step cost
productivity
usage
price effect
mix effect
timing

Explain cost movement through workload, price, mix, productivity or usage, control, and timing before deciding what should change.

Chapter-end learning

Apply, check, and remember

Apply it to your situation

Connect the chapter to a real hotel decision

As you answer, think about where this issue appears in your own property, team, report, meeting, or control process. Work through one item at a time, check the result, and then continue.

Knowledge check

Question 1 of 3

0 checked

Which statement best reflects the central rule of Chapter 6?

What this tests: Recognise the chapter's central management principle.

Before cutting a cost, explain whether the movement came from workload, price, mix, productivity, usage, control or timing.Judge the issue from one headline number and act immediately.Add as much reporting detail as possible before deciding what matters.Treat the accounting output as sufficient without testing the operating context.

Show hint

Use the owner-first rule in this chapter.

1 / 3

Memory practice

Flashcard 1 of 4

Variable cost

Reveal the answer, decide how confident you are, and then move to the next card.

Continue the discussion

Share how this applies in practice

A higher total cost can be reasonable if workload increased faster.

Housekeeping cost is 12% above last month while occupied rooms are 18% higher. Is the cost problem automatically adverse?

Compare cost and labour hours with occupied rooms or room turns, separate wage-rate and productivity effects, then judge service quality and controllable exceptions.

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