1) On an average how many rooms should be allowed each night in season for the resort to breakeven?
On an average 55 Rooms should be leased each night (out of 80) in the winter season for the resort to break even. This
2) The resort is full on weekends in the ski season. If all room rates were increased $5 on weekend nights, then the occupancy would drop to 72 rooms instead of 80, what is the revised profit before taxes for the year, per Exhibit 1?
Occupancy would drop although if room rates were raised $5 on weekend nights, the revised gain before taxes would be $27, 526.
3) What is the projected step-by-step contribution margin per occupied room/day during the offseason?
This is asking how much incremental contribution to the profit per occupied room/day during the off season.
Contribution margin is sales revenue COGS varying operating expenses (but before fixed operating expenses are deducted), average earnings per occupied room/day = $13.75. The baseline is as follows:
Average earnings per occupied room/day = $13.75. The baseline is as follows:
In contrast, at 30% occupancy we get the following:
Skyview Manor case study solution
The gain increases up by about $14,620 when rooms are rented during the summer. The contribution margin is 14,620/2160 or about $6.75/per room/day.
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