A 100-room business hotel had an ADR of $90.00 with occupancy of 70.00% every day in 2011. Assume that the hotel's annual FC is $400,000 and its VC is $512,000 in 2011. In 2012, the management foresees an increase in ADR by $10.00 and a decrease in the occupancy % to 60.00%. Based on the information given, what is the annual decrease or increase in occupancy % at breakeven in 2012 over 2011 (assume that there are 365 days in a year and there is no change in VC in 2012)?
A 100-room business hotel had an ADR of $90.00 with occupancy of 70.00% every day in 2011. Assume that the hotel's annual FC is $400,000 and its VC is $512,000 in 2011. In 2012, the management foresees an increase in ADR by $10.00 and a decrease in the occupancy % to 60.00%. Based on the information given, what is the annual decrease or increase in occupancy % at breakeven in 2012 over 2011 (assume that there are 365 days in a year and there is no change in VC in 2012)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![A 100-room business hotel had an ADR of $90.00 with occupancy of 70.00% every day in 2011.
Assume that the hotel's annual FC is $400,000 and its VC is $512,000 in 2011. In 2012, the
management foresees an increase in ADR by $10.00 and a decrease in the occupancy % to
60.00%. Based on the information given, what is the annual decrease or increase in occupancy %
at breakeven in 2012 over 2011 (assume that there are 365 days in a year and there is no change
in VC in 2012)?
b and c
Occupancy percentage at breakeven in 2012 is 1.37% lower than the one in 2011.
Occupancy percentage at breakeven in 2011 was 1.46% higher when compared to the one in 2012.
Occupancy percentage at breakeven in 2011 was 22.38%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F23bf1a68-31d8-4c8e-8d15-38412e93f49b%2F17fb4488-fdbe-4f49-87d7-5dae6e6261a4%2Fsy2kncf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A 100-room business hotel had an ADR of $90.00 with occupancy of 70.00% every day in 2011.
Assume that the hotel's annual FC is $400,000 and its VC is $512,000 in 2011. In 2012, the
management foresees an increase in ADR by $10.00 and a decrease in the occupancy % to
60.00%. Based on the information given, what is the annual decrease or increase in occupancy %
at breakeven in 2012 over 2011 (assume that there are 365 days in a year and there is no change
in VC in 2012)?
b and c
Occupancy percentage at breakeven in 2012 is 1.37% lower than the one in 2011.
Occupancy percentage at breakeven in 2011 was 1.46% higher when compared to the one in 2012.
Occupancy percentage at breakeven in 2011 was 22.38%
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