maccounting-skyviewmanor

# maccounting-skyviewmanor - Authors Philip Larson Skyview...

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Unformatted text preview: Authors: Philip Larson Skyview Manor Skyview Manor – Philip Larson 1) On average, how many rooms must be rented each night in season for the hotel to breakeven? On average, 55 Rooms must be rented each night (out of 80) in the winter season for the hotel to break even. This represents about 69% occupancy. Skyview Manor – Philip Larson 2) The hotel is full on weekends in the ski season. If all room rates were raised \$5 on weekend nights, but occupancy fell to 72 rooms instead of 80, what is the revised profit before taxes for the year, per Exhibit 1? If room rates were raised \$5 on weekend nights but occupancy fell, the revised profit before taxes would be \$27,526 . 3) What is the proposed incremental contribution margin per occupied room/day during the off-season? About \$6.75/per room/day . This is asking how much incremental contribution to the profit per occupied room/day during the off-season. Contribution margin is sales revenue – COGS – variable operating expenses (but before fixed operating expenses are deducted. Average revenue per occupied room/day = \$13.75. The baseline is as follows: Skyview Manor – Philip Larson At 30% occupancy, by constrast, we get the following: Skyview Manor – Philip Larson Therefore, profit goes up by about \$14,620 when 2160 rooms are rented during the summer. The contribution margin...
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maccounting-skyviewmanor - Authors Philip Larson Skyview...

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