Grand Garden is a luxury hotel with 155 suites. Its regular suite rate is $220 per night per suite. The hotels cost per night is $145 per suite and consists of the following.

Variable direct labor and materials cost	$	41
Fixed cost [($5,870,000/155 suites) 365 days]		104
Total cost per night per suite	$	145

The hotel manager receives an offer to hold the local Bikers Club annual meeting at the hotel in March, which is the hotels low season with an occupancy rate of under 60%. The Bikers Club would reserve 40 suites for three nights if the hotel could offer a 60% discount, or a rate of $88 per night. The hotel manager is inclined to reject the offer because the cost per suite per night is $145. Prepare an analysis of this offer for the hotel manager. Should the offer from the Bikers Club should be accepted or rejected? What is the contribution margin from accepting the offer?

Contribution margin analysis Under absorption costing, a company had the following per unit costs when 10,000 units were produced. Direct labor Direct materials Variable overhead Total variable cost Fixed overhead ($60,000/10,000 units) Total product cost per unit $ 2.50 3.50 4.50 10.50 6.00 $16.50 The company sells its product for $57.00 per unit. Due to new regulations, the company must now incur $2.50 per unit of hazardous waste disposal costs and $7,100 per year of fixed hazardous waste disposal costs. Compute the company's break-even point (in units), including hazardous waste disposal costs. Break-even point units