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Exercise 19-17 (Algo) Analyzing a special offer for a service company LO P3 Grand Garden is a hotel with 140 suites. Its
Posted: Fri Jul 01, 2022 8:30 am
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- Exercise 19 17 Algo Analyzing A Special Offer For A Service Company Lo P3 Grand Garden Is A Hotel With 140 Suites Its 1 (357.28 KiB) Viewed 41 times
Exercise 19-17 (Algo) Analyzing a special offer for a service
company LO P3 Grand Garden is a hotel with 140 suites. Its regular suite price is $210 per night per suite. The hotel's total cost per night is $150 per suite and consists of the following. Variable cost Fixed cost Total cost per night per suite The hotel manager receives an offer to hold the local Bikers' Club meeting at the hotel in March, which is the hotel's slow season with a low occupancy rate per night. The Bikers' Club would reserve 120 suites for one night if the hotel accepts a price of $118 per night. $ 110 40 $ 150 (a) What is the contribution margin from this special offer? (b) Should the Bikers' Club offer be accepted or rejected? Contribution margin from Bikers' Club special offer: Revenues from special offer Should the Bikers' Club offer be accepted or rejected?