Kristin Helmud is the general manager of Highland Inn, a local mid-priced hotel with 100 rooms. Her job objectives include providing resourceful and friendly service to the hotels guests, maintaining an 70% occupancy rate, improving the average rate received per room to $100 from the current $97, achieving a savings of 5% on all hotel costs, and reducing energy use by 10% by carefully managing the use of heating and air conditioning in unused rooms and by carefully managing the onsite laundry facility, among other means. The hotels owner, a partnership of seven people who own several hotels in the region, wants to structure Kristins future compensation to objectively reward her for achieving these goals. In the past, she has been paid an annual salary of $84,000 with no incentive pay. The incentive plans the partners developed has each of the goals weighted as follows: Measure Percent of Total Responsibility Occupancy rate (also reflects guest service quality) 20 % Operating within 95% of expense budget 30 Average room rate 30 Energy use 20 100 %

If Kristin achieves all of these goals, the partners determined that her performance should merit a bonus of $42,000. The partners also agree that her salary will need to be reduced to $72,000 because of the addition of the bonus. The goal measures used to compensate Kristin are as follows: Occupancy goal: 25,550 room-nights = 70% occupancy rate 100 rooms 365 days Compensation: 20% weight $42,000 target bonus = $8,400 $8,400/25,550 = $0.3288 per room-night Expense goal: 5% savings Compensation: 30% weight $42,000 target bonus = $12,600 $12,600/5 = $2,520 for each percentage point saved Room rate goal: $3 rate increase Compensation: 30% weight $42,000 target bonus = $12,600 $12,600/300 = $42.00 for each cent increase Energy use goal: 10% savings Compensation: 20% weight $42,000 target bonus = $8,400 $8,400/10 = $840 for each percentage point saved Required: 1. Based on this plan, what will Kristins total compensation be if her performance results are (Round your answers to the nearest whole dollar amount.) a. 30,000 room-nights, 5% saved, $3.00 rate increase, and 8% reduction in energy use? b. 26,000 room-nights, 3% saved, $1.15 rate increase, and 5% reduction in energy use? c. 29,000 room-nights, 0% saved, $1.00 rate increase, and 2% reduction in energy use? a Total Compensation b Total Compensation c Total Compensation