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Last year the Blacksburg Hotel and Leisure Center had an annual fixed cost of $1.2 million for its 200 hotel rooms, an average daily room
Last year the Blacksburg Hotel and Leisure Center had an annual fixed cost of $1.2 million for its 200 hotel rooms, an average daily room rate of $50, and an average daily variable cost of $10 for each room rented. It operated 366 days in 2008. a. What is the break-even point in number of rooms rented annually? (Your answer will be in room nights billed.) (4 points) b. In 2008, the hotel booked 45,000 room nights. In 2009, the annual fixed costs are expected to increase by $200,000. What will have to be the number of room nights booked this year to maintain the same net income? (5 points)
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