HomeSuites is a chain of all-suite, extended-stay hotel properties. The chain has 20 properties with an average of 200 rooms in each property. In year 1, the occupancy rate the number of rooms filled divided by the number of rooms available) was 70 percent based on a 365-day year. The average room rate was $214 for a night. The basic unit of operation is the night," which is one room occupied for one night. The operating income for year 1 is as follows. uites Operating Income Sales Food beverage $138,140,000 34,748,000 10,220.000 S183,100,000 revenues Labor Food & beverage Miscellaneous Management Utilities, etc. Depreciation Marketing Other costs 64,550,000 19,396,000 12,264,000 2,517,000 48.000.000 10,500,000 18,150,000 015000 $170 .000 In year 1. the average fixed labor cost was $417.000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs management, marketing, and other costs) are fixed for the firm At the beginning of year 2. HomeSu tes will open Your new properties with no change in the average number of rooms per property The bedang rate is expected to remain at 70 percent. Management has made the following additional assumption In year 1, the average fixed labor cost was $417,000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs (management, marketing, and other costs) are fixed for the firm. At the beginning of year 2, HomeSuites will open four new properties with no change in the average number of rooms per property The occupancy rate is expected to remain at 70 percent. Management has made the following additional assumptions for year 2 The average room rate will increase by 10 percent. Food and beverage revenues per night are expected to decline by 25 percent with no change in the cost. The labor cost (both the fixed per property and variable portion) is not expected to change. The miscellaneous cost for the room is expected to increase by 30 percent, with no change in the miscellaneous revenues per Utilities and depreciation costs (per property) are forecast to remain unchanged. Management costs will increase by 5 percent, and marketing costs will increase by 5 percent. - Other costs are not expected to change. room. The managers of HomeSuites are considering different pricing strategies for year 2. Under the first strategy ("High Price"), they will work to maintain an average price of $273 per night. They realize that this will reduce demand and estimate that the occupancy rate will fall to 60.0 percent with this strategy. Under the alternative strategy ("High Occupancy"), they will work to increase the occupancy rate by lowering the average price. They estimate that with an average nightly rate of $204, they can achieve an occupancy rate of 80 percent. The current estimated profit is $135,199.370. Required: a. Prepare a budgeted income statement for year 2 if the "High Price strategy is adopted. b. Prepare a budgeted income statement for year 2 if the "High Occupancy strategy is adopted. c. Which is the correct pricing strategy for year 2. Complete this question by entering your answers in the tabs below. Required A Required Required Prepares budgeted income statement for year 2 if the High Price strategy is adopted. (Round your per unit average cost Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a budgeted income statement for year 2 if the "High Price strategy is adopted. (Round your per unit average cost calculations to 2 decimal places.) HOMESUITES Operating Income Year 2 Sales revenue Lodging $ 286,977,600 Food & beverage Miscellaneous Total revenues S 286.977,600 Costs Labor Food & beverage Depreciation other posts 86.977,600 Operating profil Required 3 > Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a budgeted Income statement for year 2 if the "High Occupancy strategy is adopted. (Round your per unit average cost calculations to 2 decimal places.) HOMESUITES Operating Income Year 2 revenue Todoing Food & beverage Total revenues Labor Food & beverage Flag Required C > a. Prepare a budgeted income statement for year 2 If the "High Price" strategy is ad b. Prepare a budgeted income statement for year 2 if the "High Occupancy strateg c. Which is the correct pricing strategy for year 2. Complete this question by entering your answers in the tabs below. Required A Required B Required C Which is the correct pricing strategy for year 2. High Price Strategy High Occupancy Strategy Current Strategy