i Data Table - X $ 5 per room- night Variable operating costs Fixed costs Salaries and wages Maintenance of building and pool Other operating and administration costs $ 180,000 40,000 155,000 $ 375,000 Total fixed costs Print Print Done Done i More Info - X The capital invested in the motel is $900,000. The partnership's target return on investment is 25%. Branch expects demand for rooms to be uniform throughout the year. He plans to price the rooms at full cost plus a markup on full cost to earn the target return on investment. Print Done * Requirements 1. What price should Branch charge for a room-night? What is the markup as a percentage of the full cost of a room-night? 2. Branch's market research indicates that if the price of a room-night determined in requirement 1 is reduced by 15%, the expected number of room-nights Branch could rent would increase by 20%. Should Branch reduce prices by 15%? Show your calculations. Print Done Jason Branch is the managing partner of a business that has just finished building a 60-room motel. Branch anticipates that he will rent these rooms for 15,000 nights next year (or 15,000 room-nights). All rooms are similar and will rent for the same price. Branch estimates the following operating costs for next year: (Click the icon to view the operating costs.) (Click the icon to view additional information.) Read the requirements. Requirement 1. What price should Branch charge for a room-night? What is the markup as a percentage of the full cost of a room-night? Begin by selecting the formula, then enter the amounts and solve for the room price per night. = Price per room-night per room-night What is the markup as a percentage of the full cost of a room-night? (Enter the markup as a percentage, X%) = = Markup as a % of full cost % markup Requirement 2. Branch's market research indicates that if the price of a room-night determined in Requirement 1 is reduced by 15%, the expected number of room-nights Branch could rent would increase by 20%. Should Branch reduce prices by 15%? Show your calculations. Begin by calculating the new contribution margin which will help you make your decision. Select the formula first, then enter the amounts to calculate the contribution margin. (Round the new price per room to two decimal places. Round the contribution margin to the nearest dollar.) = New contribution margin Should Branch reduce prices by 15%? Because the contribution margin at the reduced price is the original contribution margin at the selling price you calculated in requirement 1, Branch reduce the price of the rooms. Choose from any list or enter any number in the input fields and then continue to the next