A 90-room motel has an average room rate of $65.60. Its fixed costs are $300,000 a year, and its variable costs total $476,000 at an average occupancy of 70 percent.

1. Wage rates for housekeepers are to be increased by $4.00 an hour. It takes a housekeeper 1/2 hour to clean a room. Other cost increases will cause an increase of $1.00 in the variable costs per room occupied. Fixed wages and other fixed costs are expected to increase $4,000 per month. To compensate for the increase in room rate to $73.60 (see part c), $30,000 more per year is to be spent on advertising. Operating income (before tax) is to increase 20 percent over the present $100,000 per year. What level of sales revenue is required? What is the sales revenue in terms of occupancy percentage?