Suppose a Holiday Inn Hotel Has Annual Fixed Costs Applicable

question 92

Multiple Choice

Suppose a Holiday Inn Hotel has annual fixed costs applicable to its rooms of $1.2 million for its 300-room hotel.Average daily room rents are $50 per room,and average variable costs are $10 for each room rented.It operates 365 days per year.What is the break-even point in number of rooms rented?

• A)24,000
• B)30,000
• C)100,000
• D)120,000

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Definitions:

Market Segmentation

The process of dividing a target market into smaller, more defined categories of consumers who share similar characteristics and buying preferences.

Brand Loyalty

The tendency of consumers to continuously purchase one brand's products over another, influenced by positive experiences, satisfaction, and perceived value.

Consumer Behaviour

The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.

Point of Purchase

The location or moment at which a transaction occurs, often referring to retail environments where purchasing decisions are made.