preview

Skyview Manor Essay examples

Satisfactory Essays
Open Document

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

Get Access
Related
Get Access