Question

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 $55 a night. Operating costs are as follows:

Exercise 22-6 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 $55 a night. Operating costs are as follows: Salaries Utilities Depreciation Maintenance Maid service Other costs $5,700 per month $1,400 per month $1,000 per month $810 per month $11 per room $22 per room Determine the inn's break-even point in number of rented rooms per month. Break-even point rooms LINK TO TEXT LINK TO TEXT Determine the inn's break-even point in dollars. Break-even points Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT LINK TO TEXT

Answer 1

Fixed cost = 5700+1400+1000+810 = 8910

Breakeven point = Fixed cost/Contribution margin per room

= 8910/[(55-(11+22)]

= 405 rooms

Breakeven point = 405 * 55

= 22,275

Answer 2

The above is right just misclicked