Question 3 Gontong Group is the leading Asian hotel chain. They are currently reviewing the performance of one of its theme resorts in Sentosa Island and making plans for next year. The top management is looking at the quarterly results for this year which are based on a mixed of some actual results and some forecasts to the end of this year: Quarter Revenue S Profit/(loss) S 1 800,000 (280,000) 2 2,400,000 360,000 3 3,200,000 680,000 4 1.600.000 40.000 Total 8,000,000 800.000 The resort has a capacity of 40,000 nights this year. It charges the same rate for each night throughout the year. It also operates based on the same cost structure in each quarter. The management is considering reducing unit variable cost by 20% next year. They also would like to see the profit increase to $2 million. However, the management is contemplating whether to operate at the same capacity or to maintain the same night rate in the next year. Required: (a) As the resort manager, write a memo to the management addressing their concerns. Your memo should not be more than 150 words. (11 marks) Question 3 Gontong Group is the leading Asian hotel chain. They are currently reviewing the performance of one of its theme resorts in Sentosa Island and making plans for next year. The top management is looking at the quarterly results for this year which are based on a mixed of some actual results and some forecasts to the end of this year: Quarter Revenue S Profit/(loss) S 1 800,000 (280,000) 2 2,400,000 360,000 3 3,200,000 680,000 4 1.600.000 40.000 Total 8,000,000 800.000 The resort has a capacity of 40,000 nights this year. It charges the same rate for each night throughout the year. It also operates based on the same cost structure in each quarter. The management is considering reducing unit variable cost by 20% next year. They also would like to see the profit increase to $2 million. However, the management is contemplating whether to operate at the same capacity or to maintain the same night rate in the next year. Required: (a) As the resort manager, write a memo to the management addressing their concerns. Your memo should not be more than 150 words. (11 marks)