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Star Leisure Group owns and operates a small relaxation hotel with numerous sporting facilities, residential accommodation, a cafeteria and a sports shop. The summer season lasts for 20 weeks including a peak period of 6 weeks corresponding to the school holidays. The following budgets have been prepared for the next summer season:

Accommodation 60 single rooms let on daily basis. 35 double rooms let on a daily basis at 160% of the single room rate. Fixed costs $29,900 Variable costs $4 per single room per day and $6.40 per double room per day. Sports Centre Residential guests each pay $2 per day and casual visitors $3 per day for the use of facilities. Fixed costs $15,500 Sports Shop Estimated contribution $1 per person per day. Fixed costs $8,250 Cafeteria Estimated contribution $1.50 per person per day. Fixed costs $12,750 During the summer season, the small relaxation hotel is open 7 days a week and the following activity levels are anticipated: Double rooms fully booked for the whole season. Single rooms fully booked for the peak period but at only 80% of capacity during the rest of the season. Thirty casual visitors per day on average. As a Senior Manager at the Hotel, you are required: (a) Estimate the charges for single and double rooms knowing that the small relaxation hotel wishes to make a $10,000 profit on accommodation. (b) Estimate the anticipated total profit for the small relaxation hotel as a whole for the season

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