Required information [The following information applies to the questions displayed below.] Vernon Cabins is a small motel chain located near state and national parks. Each property is made up of separate cabins. The chain has 10 properties with an average of 15 cabins at each property. In year 1, the occupancy rate (the number of rooms filled divided by the number of rooms available) was 80 percent, based on a 180-day season. The properties are closed from late fall until early spring. The average rate was $225 per night per cabin. The basic unit of operation is the "night," which is one cabin occupied for one night. The operating income for year 1 is as follows. Vernon Cabins Operating Income Year 1 Sales revenue Lodging Incidentals Forfeited deposits Costs Total revenues Labor Incidentals Miscellaneous Utilities, etc. Depreciation Management Marketing Property taxes Total costs Operating profit $ 4,860,000 475,200 129,600 $ 5,464,800 $ 1,748,000 451,200 86,400 95,000 550,000 120,000 230,000 1,640,000 $ 4,920,600 $ 544,200 Other revenues consist of incidentals (vending machine purchases, supplies, and so on) and forfeited deposits. In year 1, incidentals revenue averaged $22 per night. Reservations require a deposit. Guests who fail to cancel before three nights prior to a stay forfeit the deposit. In year 1, forfeited deposits averaged $6 per night. In year 1, the average fixed labor cost was $110,000 per property. The remaining labor cost was variable with respect to the number of nights. The costs of incidentals include $30,000 per season per property. The remaining cost of incidentals is variable with respect to the number of nights. Miscellaneous costs are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs (management, marketing, and property taxes) are fixed for the firm.