Harrison hotels

Question

Harrison hotels is considering asking a DPs to its current facility in other to improve its list of amenities. Operating the spa would require a fixed cost of $25,000 a year. Variable cost I'd estimated at $35 per customer. The hotel wants to break even if 12,000 customers use the spa facility. What should be the price of the services? 

Answer 1

Costs: 25000 + 12000x35

Revenue = 12000xP

 

Revenue = Costs

12000P = 25000 + 12000x35 = 445000

P = 445000/12000 = $37.083