Dorquay Hotel has twenty rooms available for rent. During the month of December its average room rate is expected to be $150 and its room occupancy 85 percent. Due to the holiday season, the room rate is to be increased by 10 per cent, and the occupancy is expected to be 95 per cent. In February, no further room rate increase is planned and occupancy is expected to be 90 percent.

Required
a. Calculate the budgeted room revenue for each of the three months.
b. Discuss how the management of Dorquay Hotel would have determined the occupancy rate.