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Jason Basset is the managing partner of a business that has just finished building a 60-room motel. Basset anticipates that he will rent these
Jason Basset is the managing partner of a business that has just finished building a 60-room motel. Basset anticipates that he will rent these rooms for 12,000 nights next year (or 12,000 room-nights). All rooms are similar and will rent for the same price. Basset estimates the following operating costs for next year: (Click the icon to view the operating costs.) i (Click the icon to view additional information.) Read the requirements. Requirement 1. What price should Basset charge for a room-night? What is the markup as a percentage of the full cost of a room-night? Begin by selecting the formula, then enter the amounts and solve for the room price per night. Price per room-night per room-night What is the markup as a percentage of the full cost of a room-night? (Enter the markup as a percentage, X%.) ( ( Markup as a % of full cost % markup Requirement . Basset's market research indicates that if the price of a room-night determined in Requirement 1 is reduced by 5%, the expected number of room-nights Basset could rent would increase by 5%. Should Basset reduce prices by 5%? Show your calculations. Begin by calculating the new contribution margin which will help you make your decision. Select the formula first, then enter the amounts to calculate the contribution margin. (Round the new price per room to two decimal places. Round the contribution margin to the nearest dollar.) )x New contribution margin Should Basset reduce prices by 5%? Because the contribution margin at the reduced price is the original contribution margin at the selling price you calculated requirement 1, Basset reduce the price of the rooms. Data Table Variable operating costs Fixed costs Salaries and wages Maintenance of building and pool Other operating and administration costs Total fixed costs Print Done $3 per room- night $ 173,000 52,000 219,000 $ 444,000 Choose from any list or enter any number in the input fields and then continue to the next question.
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