Contribution Margin Analysis | |
Room Rate per night | $ 125 |
less: Variable Cost per night | ($ 30 ) |
Contribution Margin per night per suite | $ 95 |
Number of Nights | 3 Nights |
Number of Suites | 50 Suites |
Contribution Margin from special offer ( $95*3 Nights*50 Suites) | $ 14,250 |
Should Pencil International accept the special offer | Yes |
Analysis :
Here , there is no additional fixed costs because of additional staff must be hired to see to the |
extra customers. Otherwise full $ 250 per night are turned away . so, The hotel will realize |
$ 14,250 increase in profits . |
Sweet Breeze International Sweet Breeze International (SBI) is a popular hotel with 150 suites. The hotel's...
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Grand Garden is a luxury hotel with 160 suites. Its regular suite rate is $230 per night per suite. The hotel's cost per night is $155 per suite and consists of the following. Variable direct labor and materials cost Fixed cost t($5,970,000/160 suites) + 365 days) Total cost per night per suite $ 53 102 The hotel manager received an offer to hold the local Bikers' Club annual meeting at the hotel in March, which is the hotel's low season...
Exercise 19-13 Analyzing variable cost for a special order A1 Grand Garden is a hotel with 150 suites. Its regular suite rate is $250 per night per suite. The hotel's cost per night is $140 per suite and consists of the following Variable cost $ 30 Fixed cost 110 Total cost per night per suite $140 The hotel manager receives an offer to hold the local Bikers' Club annual meeting at the hotel in March, which is the hotel's low...
Grand Garden is a luxury hotel with 160 suites. Its regular suite rate is $210 per night per suite. The hotel’s cost per night is $135 per suite and consists of the following. Variable direct labor and materials cost $ 34 Fixed cost [($5,870,000/160 suites) ÷ 365 days] 101 Total cost per night per suite $ 135 The hotel manager receives an offer to hold the local Bikers’ Club annual meeting at the hotel in March, which is the hotel’s...
Exercise 19-13 Variable cost analysis for a special order LO A1 Grand Garden is a luxury hotel with 160 suites. Its regular suite rate is $200 per night per suite. The hotel's cost per night is $125 per suite and consists of the following. Variable direct labor and materials cost Fixed cost [($5,870,000/160 suites ) - 365 days ] Total cost per night per suite $ 24 101 $ 125 The hotel manager received an offer to hold the local...
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