19.14

Empire Plaza Hotel is a hotel with 400 rooms. Its regular room rate is $300 per night per room. The hotel's cost is $165 per night per room and consists of the following. $ 40 Variable cost Fixed cost Total cost per night per room 125 $165 The hotel manager receives an offer to hold the Junior States of America (JSA) convention at the hotel in February, which is the hotel's low season with an occupancy rate of under 45%. JSA would reserve 100 rooms for four nights if the hotel could offer a 50% discount, or a rate of $150 per night. The hotel manager is inclined to reject the offer because the cost per room per night is $165. Should the offer from JSA be accepted or rejected? What is the contribution margin from accepting the offer