1. You manage a small motel, which has 40 rooms, with an average room rate of $64 on a 70 percent occupancy rate. Fixed costs are $480,000 and the VC per room sold is $6. What do you anticipate your annual operating income (before tax) to be in the coming year?

2. A 70-room motel’s average room rate is $150. Its average occupancy is 72 percent. Fixed costs are $1,360,000 a year and variable costs are $222,222 a year. Calculate the motel’s operating income for the year.