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12 February, 17:52

Harrison hotels is considering adding a spa to its current facility in order to improve its list of amenities. operating the spa would require a fixed cost of $22500 a year. variable cost is estimated at $30 per customer. the hotel wants to break even if 12600 customers use the spa facility. what should be the price of the spa services? $ (give your answer to the nearest penny)

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  1. 12 February, 19:29
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    F = $22,500 per year

    VC = $30 per customer

    Q₍be₎ = 12,600 customers

    SP = ?

    Q₍be₎ = F / (SP - VC)

    12600 = 22500 / (SP - 30)

    12600 (SP - 30) = 22500

    12600SP - 378000 = 22500

    12600SP = 22500 + 378000

    12600SP = 400,500

    SP = 400,500 / 12,600

    SP = $31.78
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