# Skyview Manor Essay examples

1072 Words5 Pages
Questions for Skyview Manor 1. On average, how many rooms must be rented each night in season for the hotel to breakeven? First Alternative: Step 1: Calculate Weighted Average Revenue per room = [Pr(Specific Room Type) x Rent for Specific Room Type] Pr(East) = 50 / 80 Pr(West) = 30 / 80 Pr(Single) = 2 / 10 (Keep in mind that 2:8 implies a ratio of 2/10) Pr(Double) = 8 / 10 Room Type Rev per Room Weighted Average Pr(East Single) = (50 / 80) x (2 / 10) = 12.5% \$ 1 5 \$ 1 .875 Pr(East Double) = (50 / 80) x (8 / 10) = 50.0% \$ 2 0 \$ 1 0.000 Pr(West Single) = (30 / 80) x (2 / 10) = 7.5% \$ 2 0 \$ 1 .500 Pr(West Double) = (30 / 80) x (8 / 10) = 30.0% \$ 2 5 \$ 7 .500 100.0% \$ 2 0.875 \$20.875 equals the Weighted Average Revenue per…show more content…
What is the proposed incremental contribution margin per occupied room/day during the off-season? Calculate Rev per room in off-season Room Type Rev per Room Weighted Average Pr(West Single) = (2 / 10) = 20.0% \$ 1 0 \$ 2 .000 Pr(West Double) = (8 / 10) = 80.0% \$ 1 5 \$ 1 2.000 100.0% \$ 1 4.000 \$14.00 equals the Weighted Average Revenue per Night Calc Probability CM = Rev – VC = \$14 – \$2.53 = \$11.47 4. For each alternative in the case, list the annual expenses that are incremental to that decision alternative but are not related to the room/days occupied? Alternative – Open in the off season \$2,000 (Repairs) + \$500 (Insurance) + \$3,200 (Mrs. Kacheck) + \$3,360 (Maid) + \$1,312 (Payroll Taxes) + \$720 (Telephone) + \$3,600 (Electricity) = \$14,692 Mrs Kacheck - \$3,200 = \$20/day x 5 days/wk x 4 wks/mo x 8 mos Maid - \$3,360 = \$15/day x 7 days/wk x 4 wks/mo x 8 mos o Assuming that one maid at 7 days per week is sufficient to clean all the rooms. Payroll Taxes - \$1,312 = 20% x (\$3,200 + \$3,360) Telephone - \$720 = \$3 x 30 rooms x 8 months Electricity o Electricity per room per month = (\$6,360 - \$290 x 4 – 8 x 50) / (80 rooms x 4 months) = \$15 per available room per month o Electricity in off-season - \$3,600 = \$15 x 30 rooms x 8 months Alternative – Advertising \$500 x 8 months = \$4,000