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Question 2 (8 marks) Glitz hotel, a 520-room hotel, rents hotel rooms for $120/night. At the current sales level of 440 rooms per night,
Question 2 (8 marks) Glitz hotel, a 520-room hotel, rents hotel rooms for $120/night. At the current sales level of 440 rooms per night, Glitz currently makes a profit of $30/room: Sales Costs Profit $120 90 30 It costs Glitz $90/night to maintain a room ($60 in depreciation, $25 in variable maintenance and $5 in fixed booking costs). Each of these are separate situations: A. What is the current number of rooms per night needed to break even. B. What should the price be per room if Glitz wants to make a total nightly profit of $16,000. C. Glitz has been approached by Conventions2000.com to purchase a block of 220 rooms for $80/room per night. If this special order is accepted, Conventions2000.com would take care of all booking costs for the rooms booked through Conventions2000.com, and the $5 fixed booking costs can be eliminated. Required: Should Glitz accept this special offer (include both qualitative and quantitative analysis)
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