Suppose a Super 9 Hotel Has Annual Fixed Costs Applicable

question 132

Multiple Choice

Suppose a Super 9 Hotel has annual fixed costs applicable to its rooms of $1.0 million for its 300-room hotel.Average daily room rents are $60 per room and average variable costs are $10 for each room rented.It operates 365 days per year.If the hotel is one-half full throughout the entire year,what is the amount of net income for one year?

• A) $1,737,500
• B) $4,475,000
• C) $5,475,000
• D) $5,570,000

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Definitions:

Merchandising Company

A business that purchases finished products and sells them to consumers without changing the physical form of the goods.

Create Purchase Order

A document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.

Receive Inventory

The process of accounting for and physically taking possession of goods or materials ordered from suppliers into a business's warehouse or inventory.

Service Company

A business that provides intangible products or services to customers, such as consulting, maintenance, or software development.