Requirements 1. What price should Bartlett charge for a room-night? What is the markup as a percentage of the full cost of a room-night? 2. Bartlett's market research indicates that if the price of a room-night determined in requirement 1 is reduced by 10%, the expected number of room-nights Bartlett could rent would increase by 5%. Should Bartlett reduce prices by 10% ? Show your calculations. Data table Variable operating costs room-night Fixed costs Salaries and wages $182,000 Maintenanceofbuildingandpool35,000 \begin{tabular}{lrr} Other operating and administration costs & 233,000 \\ & $ & 450,000 \\ Total fixed costs & $5,000 \\ \hline \end{tabular} More info The capital invested in the motel is $1,100,000. The partnership's target return on investment is 25%. Bartlett expects demand for Tooms to be uniform throughout the year. He plans to price the rooms at full cost plus a markup on full cost to earn the target return on investment. Jason Bartlett is the managing partner of a business that has just finished building a 60 -room motel. Bartiett anticipates that he will rent these rooms for 12,500 nights. next year (or 12,500 room-rights). All rooms are similar and will rent for the same price. Bartlett estimates the following operating costs for next year: (Click the icon to view the operating costs.) Click the icon to view additional information.) Read the regurements. feguirement 1. What price should Bartlett charge for a room-night? What is the markup as a percentage of the full cost of a room-night? Begin by solecting the formula, then onler the amounts and solve for the room price per night. What is the markup as a porcentage of the ful cost of a roorn,night? (Enter the markup as a percontage, XS.) Requirement 2. Barsetts markat research indicates that if the price of a toom-night determined in Requirement 1 is reduced by 10%, the expected number of room-nights Bartiot oculd rent would increase by 5%. Should Bartlett reduce prices by 10% ? Show your calculations. Requirement 2. Bartletf's markot research indicates that if the price of a room-night determined in Requirement 1 is reduced by 10%, the expected number of room-nights Bartlett could rent would increase by 5%. Should Bartlett reduce pricos by 10% ? Show your calculations. Begin by calculating the now conatribution margin which will help you make your decision. Soloct the formula first, then enter the amounts to calculate the contribution margin. (Round the new price per room to two decimal places. Round the contribution margin to the nearest dollar.) =Newcontributionmargin= Should Bartlett reduce prices by 10% ? Because the contribution margin at the reduced price is the original contrbution margin at the solling price you calculated in requirement 1, Eartlett reduce the price of the rooms
