Analyze Cityscape Hotels

Cost Per Room Night

$($at normal occupancy$)$

a$.$ What is the contribution margin for a room night under the normal pricing if only the hotel depreciation and hotel staff $($excluding housekeeping$)$ are assumed fixed for all occupancy levels?

b$.$ Determine the contribution margin for a room night under the proposed weekend pricing.

c$.$ Prepare a differential analysis showing the differential income for an average weekend between the existing $($Alternative $1)$ and discount $($Alternative $2)$ price plan.

Differential Analysis

Continue with Existing Plan $($Alt$.1)$ or Execute the Discount Plan $($Alt$.2)$

d$.$ Should manaement accept the proposed weekend pricing plan?