Triatt Resort has 200 rooms.Each room rents at $130 per night and variable costs total $42 per room per night of occupancy.The fixed costs total $18,700 per month.If Triatt is able to increase occupancy from 70% to 80%, by how much will total costs increase per day during June?

Question

Quizplus · Accepted Answer

The total costs increase per day due to higher occupancy will only involve the variable costs, as fixed costs remain constant regardless of the occupancy rate. The increase from 70% to 80% occupancy in a 200-room resort means an additional 20 rooms are occupied. At a variable cost of $42 per room per night, the total increase in costs per day is 20 rooms * $42 = $840.

Triatt Resort Has 200 Rooms