Excess CapacityAssume Marriott International just opened a new hotel in Bethesda, MD. The hotel has 588 rooms, or 214,620 room-nights per year (equal to 365 x 588). The hotel was built with the aim that it would be 90% occupied during the spring and summer months,and it would be at a much lower capacity of 50% during the remaining portion of the year. The cost of the building cleaning and maintenance is estimated to be $67,200,000 per year.a. Calculate the practical capacity of the hotel.Note: Show all decimal places in your answer.0Xroom-nightsb. Calculate the cost per room night of cleaning and maintenance.Note: Round answer to the nearest cent.$0Xc. Calculate the cost of excess capacity for the year.Note: Use rounded answer from part b to calculate the answer to this question.Note: Round final answer to the nearest dollar.$0d. Should the division or customers be accountable for the cost of excess capacity?The cost of excess capacity should be →The hotel's size wasallocated to customers who visit during peak season.→ determined based on peak season demand. Consequently, excess capacityis a cost of meeting demand during the high-demand season.

The performance metrics of hospitality industry is quite different from other industries as it…

Answered: Assume Marriott International just…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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