kindly show the STEP-BY-STEP solution and formula used (right side explanation) for 8.26

thank you.

8.25 1The opportunity cost of the 50 rooms on October 20 is P5,000 because that is the amount of revenue that the hotel would have generated if it had sold the rooms at the market rate of P100 per room. 8.25 Since the hotel has agreed to sell the rooms to United Airlines for P50 per room, it is foregoing the The Sheraton Corporation operates many hotels throughout the world. Suppose on its Los Angeles hotels is facing difficult times because of the opening of several new comper of potential revenue of P5,000. hotels. To accommodate its flight personnel, United Airlines has offered sheraton a contract the coming year that provides a rate of P50 per night per room for a minimum of 50 room, for 2. The opportunity cost on December 28 is the difference between what Sheraton could have earned 365 nights. This contract would assure Sheraton of selling 50 rooms of space nightly, eye for by renting the rooms at the market rate and what it actually earned by renting the rooms at the some of the rooms are vacant on some nights. The Sheraton manager has mixed feelings about the contract. On several peak night reduced rate under the contract with United Airlines. On that date, 10 rooms would have been rented during the year, the hotel could sell the same space for P100 per room. at an average rate of P80, for a total of P800. Required: I. Suppose the contract is signed. What is the opportunity cost of the 50 rooms or October 20, the night of a big convention of retailers when every midtown hotel 3. The break even point is when the occupancy rate is 50%. This is because the hotel would be making the same amount of money per room if it accepted the contract or not. room is occupied? 2. What is the opportunity cost on December 28, when only 10 of these rooms would be expected to be rented at an average rate of P80? 3. If the year-round rate per room averaged P90, what percentage of occupancy of the 8.26 50 rooms in question would have to be rented to make Sheraton indifferent about 1The expected average daily revenue would be $79.50 per room, and the expected variable costs accepting the offer? would be $10 per room, for a total expected daily cost of $89.50 per room. Therefore, the expected 8.26 net daily loss would be $10 per room, and the expected total loss over the course of the year would be Assume the same facts as in the problem 4.25. However, also assume that the variable $36,500. costs per room per day are P10. REQUIRED: 1. Suppose the best estimate is a 53% general occupancy rate for the 50 rooms at an 2. The total variable cost is the cost that fluctuates depending on how many rooms are occupied. In average P90 room rate for the next year. Should Sheraton accept the contract? this example, the total variable cost per room per day would be $10. If 50% of the rooms are occupied, 2. What percentage of occupancy of the 50 rooms in question would make Sheraton indifferent about accepting the offer? the total variable cost is $500. The total variable cost would be $600 if the occupancy rate is 60%. In order for Sheraton to be ambivalent about accepting the offer, the variable cost per room must be the same at 50% and 60% occupancy. When the total variable cost is $550, this happens. As a result, the occupancy must be at least 55% for Sheraton to consider accepting the offer