Queens Resort (Pty) Ltd is a small lodge with affordable accommodation. They are having trouble setting the prices for the products and services they offer. The managers have put together the following estimates of rates per room and the corresponding estimate demand. Price per room Demand - occupancy R100 100% R150 90% R200 80% R250 65% R300 50% Additional information: The maximum occupancy is 200 rooms per night The total costs which are considered to be fixed are estimated at R80 000 per annum. The variable cost per room (nightly rate) is estimated at R60. Required: Determine the rate at which the profit of Queens Resort will be maximised. Give a reason for your answer. Round all amounts to the nearest rand.
Queens Resort (Pty) Ltd is a small lodge with affordable accommodation. They are having
trouble setting the prices for the products and services they offer.
The managers have put together the following estimates of rates per room and the
corresponding estimate demand.
Price per room Demand - occupancy
R100 100%
R150 90%
R200 80%
R250 65%
R300 50%
Additional information:
The maximum occupancy is 200 rooms per night
The total costs which are considered to be fixed are estimated at R80 000 per
annum.
The variable cost per room (nightly rate) is estimated at R60.
Required:
Determine the rate at which the profit of Queens Resort will be maximised.
Give a reason for your answer.
Round all amounts to the nearest rand.
Answer:
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