Question

IK . Due lh 19 hours The Overton Hotel in Lubbock has the following Characteristics Find the Contribution to Profit & Overhead Characteristic/Variable Custommers for this day (D) Average price/room night (P) Variable Cost/Room night (v) Maximum price/room night Max rooms available for sale this day Business Hotel Customers [B] 400 room nights rented (DE) $150 (PR) $30 $180 500 room nights available Convention Association Hotel Customers [C] 900 room nights rented (DC) $90 (PC) $30 $100 1000 room nights available O A $78,000 O B $84,000 O c $95,000 O D $102,000 O E $111,000 Unanswered 2 attempts left Submit

Answer 1

The contribution will be the Demand * (Price - Variable cost) for both types of rooms.

So,

Contribution = D_B*(P_B - V) + D_C*(P_C - V) = 400*(150 - 30) + 900*(90 - 30) = 102,000