Q4 3 Points Eric is the manager of a newly built spa-hotel that has 60 identical rooms. The marketing department anticipates that these rooms will be rented for 20,000 nights next year. Additional information is provided below: Variable operating costs: $3 per room per night Fixed costs: Fixed operating costs: $170,000 Staff salary and wages: $50,000 Other operating costs: $120,000 Total fixed costs: $340,000 Q4.1 1 Point If the target contribution margin per room-night is $29, what price should Eric charge? What is the markup as a percentage of the full cost of a room-night? Show your work $29 = X - $3 (let assumed selling price as X) $29+ $3 = X $ 32 = X selling price per room night / charged by Eric per room night = $32 Sales value = 20,000' 32 = 640,000 Product cost = variable cost + fixed cost = 20,000. 3) + 340,000 = 60,000 + 340,000 = $ 400,000 Makeup percentage: = $640,000 - $400,000 / $400,000 100 = $240,000 / $400,000 100 = 0.6 100 = 60% markup percentage = 60% Please select file(s) Select file(s) Save Answer Last saved on Apr 22 at 3:22 PM Q4.2 Q4.2 2 Points The marketing department informs Eric that if the price per night will be reduced by 15%, the expected demand will increase by 10%. Should Eric reduce the price? Show your work. Enter your answer here Please select file(s) Select file(s) Save