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variable costs single room rs 220 each per day double room rs 350 each per day 649272

A hotel has a capacity of 100 single rooms and 20 double rooms. The average occupancy of both single and double room is expected to be 80% throughout the year of 365 days. The rent for the double room has been fixed at 125% of the rent of the single room. The costs are as under:

Variable costs: Single room Rs.220 each per day, double room Rs.350 each per day

Fixed costs: Single room Rs.120 each per day, double room Rs.250 each per day Calculate the rent chargeable for single and double rooms per day in such a way that the hotel earns a margin of safety of 20% on hire of room.

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