Question

Hile D Home Insert Page Layout Formulas Data Review ViewHelpDYMO Label QuickBooks PROTECTED VIEW Be careful--files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View Enable Editing C D E F G H 1 E5-9 Compute break-even point 2 The Palmer Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at 3 $60 a night. Operating costs are as follows. Salaries $5,900 per month Utilities $1,100 per month Depreciation $1,000 per month Maintenance $100 per month Maid Service $14 per room Other costs $28 per room 10 11 Instructions 12 Determine the inn's break-even point in (a) number of rented rooms per month and (b) dollars. 13 NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?". 15 17(a) Determine the Inn's break-even point in number of rented rooms per month 18 Contribution margin per room 19 Rent per room Value Variable cost per room Contribution margin per room Contribution margin ratio Contribution margin per room Rent per room Contribution margin ratio Value Value Fixed costs Break-even point in rooms E5- 9 5-2A CD:5 * Type here to such

Answer 1

Part A - Rent per room is 60$

(a)	Inn's Break - Even Point in number of Rented Rooms per month
	Contribution Margin per room
		Amount in $
	Rent Per room for a night	60
	Variable Cost per room
	Maid Service per room	14
	Other Costs per room	28
		42
	Contribution Margin per room	18
	Contribution Margin Ratio
	Contribution Margin per room	18
	Rent Per Room	60
	Contribution Margin Ratio	30.00%
	Fixed Costs
	Salaries	5900
	Utilities	1100
	Depreciation	1000
	Maintenance	100
	Fixed Costs	8100
	Break Even Point in Rooms
	Fixed Costs	8100
	Contribution Margin per room	18
	Break Even Point in Rooms	450
(b)	Inn's Break - Even Point in Dollars
	Break Even Point in Dollars
	Break Even Point in Rooms	450
	Rent per room	60
	Break Even Point in Dollars	27000
	OR
	Fixed Costs	8100
	Contibution Margin Ratio	30.00%
	Break Even Point in Dollars	27000

Part B - Rent per room is 65$ and Fixed Cost is $ 8750

(a)	Inn's Break - Even Point in number of Rented Rooms per month
	Contribution Margin per room
		Amount in $
	Rent Per room	65
	Variable Cost per room
	Maid Service per room	14
	Other Costs per room	28
		42
	Contribution Margin per room	23
	Contribution Margin Ratio
	Contribution Margin per room	23
	Rent Per Room	65
	Contribution Margin Ratio	35.38%
	Fixed Costs	8750
	Break Even Point in Rooms
	Fixed Costs	8750
	Contribution Margin per room	23
	Break Even Point in Rooms	380
(b)	Inn's Break - Even Point in Dollars
	Break Even Point in Dollars
	Break Even Point in Rooms	380
	Rent per room	65
	Break Even Point in Dollars	24,728
	OR
	Fixed Costs	8750
	Contibution Margin Ratio	35.38%
	Break Even Point in Dollars	24728