Q$3$

$3$ Points

Grading comment:

Eric is the manager of a newly built spa$-$hotel that has $60$ identical rooms. The marketing department anticipates that these rooms will be rented for $20,000$ nights next year. Additional information is provided below:

Variable operating costs: $$3$ per room per night

Fixed costs: Fixed operating costs: $$170,000$ Staff salary and wages: $$50,000$ Other operating costs: $$120,000$ Total fixed costs: $$340,000$

Question $3\mathrm{.}1$

Q$3\mathrm{.}1$

$1$ Point

Grading comment:

If the target contribution margin per room$-$night is $$29,$ what price should Eric charge? What is the markup as a percentage of the full cost of a room$-$night? Show your work.