The Sunrise Hotel has 200 rooms. Each room rents at $110 per night and variable costs total $16 per room per night of occupancy. Fixed costs total $84,000 per month. 1. If the hotel spends an additional $10,000 in the month of February on advertising they feel that they can expect occupancy rate to increase by 5%. What would be the financial impact of spending this additional money on advertising for the month of February (28 days)? 2. If 80% of the rooms are occupied each night in the month of February (28 days) what will total costs be for the month?
The Sunrise Hotel has 200 rooms. Each room rents at $110 per night and variable costs total $16 per room per night of occupancy. Fixed costs total $84,000 per month. 1. If the hotel spends an additional $10,000 in the month of February on advertising they feel that they can expect occupancy rate to increase by 5%. What would be the financial impact of spending this additional money on advertising for the month of February (28 days)? 2. If 80% of the rooms are occupied each night in the month of February (28 days) what will total costs be for the month?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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