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Triatt Resort has 200 rooms. Each room rents at $130 per night and variable costs total $42 per room per night of occupancy. The fixed
Triatt Resort has 200 rooms. Each room rents at $130 per night and variable costs total $42 per room per night of occupancy. The fixed costs total $18,700 per month. If Triatt spends an additional $30,000 in June on advertising, it estimates it can expect an occupancy rate of 85%. What will be the monthly financial impact of spending this additional money on advertising over an occupancy level of 70% during June?
A. | Total fixed costs will decrease. | |
B. | Total costs will increase by $1,260 | |
C. | Profit will increase by $7,800 | |
D. | Profit will increase by $49,200 |
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