Solution-What equivalent occupancy percentages must be

What equivalent occupancy percentages must be achieved

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Reference no: EM132540831

The Typhoon Resort, which has 100 rooms, has currently been experiencing an occupancy dip to a 60.00% level. The current rack rate is $80.00 with a marginal cost of $20.00 per room. The management of this resort would like to see the options when they apply $10.00 and 10.00% discounts from the current rack rate separately.

Question 1: Based on these two discount situations, what equivalent occupancy percentages must be achieved to maintain the same levels of contribution margin for both $10.00 and 10.00% discounts from the current rack rate?

Question 2: Also, what is the increase in #of rooms sold over the current #of rooms sold when the management applies $10.00 discount (assume that marginal cost will remain the same for all of the discount situations)?

Reference no: EM132540831

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What equivalent occupancy percentages must be achieved

Reference no: EM132540831

Reference no: EM132540831

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