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Problem 2. Ada Hotel sells two room tpes: standard rooms and deluxe rooms. Average daily rate (ADR) and variable costs (VC) of the two room
Problem 2. Ada Hotel sells two room tpes: standard rooms and deluxe rooms. Average daily rate (ADR) and variable costs (VC) of the two room types are provided in the table below: (Hint: Treat two room types as two different products.) Standard rooms Deluxe rooms ADR ($) 489.20 782.72 Variable Cost ($) 317.98 453.98 The Mock Hotel's fixed costs for a month is = 313088 Sales mix (contribution of each room type to total room revenue) of the hotel is: Deluxe rooms Standard rooms 82% 18% Required: Using the information provided above, answer the following questions: a. What is the break-even room nights (number) for the the hotel given the sales mix of the two room packages? b. What must be the room revenue for the hotel to make a profit of $50,000 a month? c. If the hotel is considering an advertisement campaign for its rooms with a cost $5,000, hom much in room revenue should be generated to cover this extra cost
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