The marketing department of Giggo Hotels has estimated the a number of hotel rooms (it has a
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The marketing department of Giggo Hotels has estimated the a number of hotel rooms (it has a capacity of 200) that could be sold at different price levels. This information is shown below:
Giggo has estimated its variable costs at \($25\) per room per night. It also incurs costs £10 per room per night for utilities, depreciation, and security, regardless of the occupancy fate.
a. Calculate the occupancy rate that Giggo needs in order to maximize its profits.
b. What occupancy rate does Giggo need to break even if its price was set at \($125\) and fixed costs were $15,000?
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Accounting For Managers Interpreting Accounting Information For Decision Making
ISBN: 9781118037966
1st Canadian Edition
Authors: Paul M. Collier, Sandy M. Kizan, Eckhard Schumann
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