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Kristin Helmud is the general manager of Highland Inn, a local mid-priced hotel with 100 rooms. Her job objectives include providing resourceful and friendly service to the hotels guests, maintaining an 75% occupancy rate, improving the average rate received per room to $92 from the current $89, achieving a savings of 5% on all hotel costs, and reducing energy use by 10% by carefully managing the use of heating and air conditioning in unused rooms and by carefully managing the onsite laundry facility, among other means. The hotels owner, a partnership of seven people who own several hotels in the region, wants to structure Kristins future compensation to objectively reward her for achieving these goals. In the past, she has been paid an annual salary of $76,000 with no incentive pay. The incentive plan the partners developed has each of the goals weighted as follows:

Measure	Percent of Total Responsibility
Occupancy rate (also reflects guest service quality)			15	%
Operating within 95% of expense budget			35
Average room rate			35
Energy use			15
			100	%

If Kristin achieves all of these goals, the partners determined that her performance should merit a bonus of $36,000. The partners also agree that her salary will need to be reduced to $64,000 because of the addition of the bonus.

The goal measures used to compensate Kristin are as follows:

Occupancy goal:	27,375 room-nights = 75% occupancy rate 100 rooms 365 days
Compensation:	15% weight $36,000 target bonus = $5,400
	$5,400/27,375 = $0.1973 per room-night
Expense goal:	5% savings
Compensation:	35% weight $36,000 target bonus = $12,600
	$12,600/5 = $2,520 for each percentage point saved
Room rate goal:	$3 rate increase
Compensation:	35% weight $36,000 target bonus = $12,600
	$12,600/300 = $42.00 for each cent increase
Energy use goal:	10% savings
Compensation:	15% weight $36,000 target bonus = $5,400
	$5,400/10 = $540 for each percentage point saved

Kristins new compensation plan will thus pay her a $64,000 salary plus 19.73 cents per room-night sold plus $2,520 for each percentage point saved in the expense budget plus $42 for each cent increase in the average room rate plus $540 for each percentage point saved in energy use. The minimum potential compensation would be $64,000 and the maximum potential compensation for Kristin would be $64,000 + $36,000 = $100,000

Required: 1. Based on this plan, what will Kristins total compensation be if her performance results are (Round your answers to the nearest whole dollar amount.)

a. 30,000 room-nights, 5% saved, $3.00 rate increase, and 8% reduction in energy use?

b. 26,000 room-nights, 3% saved, $1.15 rate increase, and 5% reduction in energy use?

c. 29,000 room-nights, 0% saved, $1.00 rate increase, and 2% reduction in energy use?

Answer is complete but not entirely correct.

a.	Total compensation	$98,921 incorrect
b.	Total compensation	$84,220 correct
c.	Total compensation	$74,681 incorrect