A hotel sells its single room nights for an average of $90 and its double room nights for an average of $120. The variable cost per single room night sold is $10 and the variable cost per double room night sold is $20. The hotel has annual fixed costs of $884,000. In the past the hotel has sold three single rooms for each double room sold. Based on the 3:1 sales mix achieved in the past, what combination of single and double room sales must be made in order for the hotel to breakeven?
A) 7,800 singles and 2,600 doubles.
B) 7,200 singles and 2,400 doubles.
C) 12,600 singles and 4,200 doubles.
D) 14,700 singles and 4,900 doubles.
E) None of the above
Correct Answer:
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