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Exercise 19-17 (Algo) Analyzing a special offer for a service company LO P3 Grand Garden is a hotel with 220 suites. Its regular suite

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Exercise 19-17 (Algo) Analyzing a special offer for a service company LO P3 Grand Garden is a hotel with 220 suites. Its regular suite price is $210 per night per suite. The hotel's total cost per night is $150 per suite and consists of the following. Variable cost Fixed cost Total cost per night per suite $ 110 40 $150 The hotel manager receives an offer to hold the local Bikers' Club meeting at the hotel in March, which is the hotel's slow season with a low occupancy rate per night. The Bikers' Club would reserve 200 suites for one night if the hotel accepts a price of $118 per night. (a) What is the contribution margin from this special offer? (b) Should the Bikers' Club offer be accepted or rejected? Contribution margin from Bikers' Club special offer: Revenues from special offer Variable costs Should the Bikers' Club offer be accepted or rejected?

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