Suppose the in & Out Motel Has Annual Fixed Costs

question 41

Multiple Choice

Suppose the In & Out Motel has annual fixed costs applicable to its rooms of $1.2 million for its 300- room motel, average daily room rents of $50, and average variable costs of $10 for each room rented. It operates 365 days per year. The percent of occupancy for the year needed to breakeven is:

• A) 25%
• B) 27.4%
• C) 100%
• D) 3.65%

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Definitions:

Disadvantage

An unfavorable circumstance or condition that reduces the chances of success or effectiveness.

Risk

The possibility of loss, injury, or other adverse or unwelcome circumstance; a chance or situation involving such a possibility.

Shared Leadership

A leadership approach where responsibilities and roles are distributed among group members, rather than centralized in a single leader.

Team Cohesiveness

The extent to which team members are attracted to the team and motivated to stay in it, characterized by strong bonds, mutual support, and a shared sense of belonging.