Triatt Resort Has 200 Rooms

Multiple Choice

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 spends an additional $30,000 in June on advertising, it estimates it can expect an occupancy rate of 85%. What would be the financial impact of spending this additional money on advertising over an occupancy level of 70% during June?

A) Net income will increase by $49,200
B) Net income will increase by $7,800
C) Total fixed costs will decrease.
D) Total costs will increase by $1,260