Sweet Breeze International

Sweet Breeze International (SBI) is a popular hotel with 150 suites. The hotel's rate for regular suite is $250 per night per suite. SBI's cost per night is $140 per suite. Below is a breakdown of its cost: Variable direct labor and materials cost Fixed cost [($6,022,500/150 suites) + 365 days) Total cost per night per suite $ 30 110 $ 140 SBI's manager receives an offer to hold Pencil International's annual meeting at the hotel in April, during the Sol's low season with an occupancy rate of under 40%. The Pencil International wishes to reserve 50 suites for three nights if provided a 50% discount, or a rate of $125 per night. SBI's manager is thinking about rejecting the offer since the cost per sulte per night is $140. Prepare an analysis of this offer for SBI's manager. Should the offer from the Pencil International be accepted or rejected? What is the contribution margin from accepting the offer? Contribution margin analysis Room rate per night Variable cost per night