Suppose a Hotel Has Annual Fixed Costs Applicable to Its

question 59

Multiple Choice

Suppose a hotel has annual fixed costs applicable to its rooms of $2.0 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.If the hotel is completely full throughout the year,what is net income for one year?

• A) $1,280,000
• B) $2,380,000
• C) $3,180,000
• D) $4,380,000

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Definitions:

Fraud

Deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

Employee Fraud

Dishonest activities conducted by employees to provide them with an advantage, financial or otherwise, at the expense of their employer.

Inventories

Goods and materials that a business holds for the purpose of resale or production.

Manufacturers

Manufacturers are entities engaged in the transformation of raw materials or components into finished goods that are sold to consumers, businesses, or other manufacturers.