1. Determine the ABC-based unit costs for each occupied room for each room type. An occupied room is defined as a room that is occupied for that night.

Step 1: Allocate resources to activities and allocate resources to cost drivers

Step 2: Allocate activity cost to room type

Step 3: Add direct costs to room type

Step 4: Find total cost per room type: By Activity and Total (Activity + Direct)

Step 5: Find total cost per occupied room: By Activity and Total

2. Comment briefly on what management insights are created with the ABC analysis of profitability by room type.