CA Inter P4 · Chapter 11 · Question 6 of 8
A hotel has 120 rooms with an average occupancy of 75% and is open 360 days a year. Total annual cost is ₹1,94,40,000. The cost per room-day occupied is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) ₹600.00
Explanation
Room-days occupied = 120 x 75% x 360 = 32,400. Cost per room-day = ₹1,94,40,000 / 32,400 = ₹600. Ignoring occupancy would give ₹450, which understates the cost of rooms actually let.
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