=+If you are not familiar with Priceline.com Inc., go to its Web site. Assume that an individual bids $60 on Priceline.com for a room in Dallas, Texas, on August 24. Assume that August 24 is a Saturday, with low expected room demand in Dallas at a MarriottInternational, Inc., hotel, so there is excess room capacity. The fully allocated cost per room per day is assumed from hotel records as follows:

Housekeeping labor cost* $30 Hotel depreciation expense 42 Cost of room supplies (soap, paper, etc.) 5 Laundry labor and material cost* 10 Cost of desk staff 5 Utility cost (mostly air conditioning) 3 Total cost per room per day $95