Super 8 has annuial fixed costs of $900,000 for its 100 room motel, average daily room rents of $54, and average variable costs of $9 for each room rented. It operates 365 days per year.
1. How much net income on roomw eill super 8 generate (a) if the motel is completely full throughout the entire year and (b) if the motel is half full?
2 Compute the break-even point in number of rooms rented. What percentage occupancy for the year is needed to break even.
