1.
Break even point in rooms = Fixed cost / Contribution margin per unit
Break even point in rooms = $(11,800+2,100+1,500+800) / ($60-8-34)
Break even point in rooms = $16,200 / $18 = 900 rented rooms
Break even point in dollars = Break even point in rooms * rent per room
Break even point in dollars = 900 * $60 = $54,000
2.
Margin of safety = Sales - Breakeven sales
Margin of safety = $90,000 (50*30*$60) - $54,000 = $36,000
Margin of safety ratio = Margin of safety / Sales * 100
Margin of safety ratio = $36,000 / $90,000 * 100 = 40%
Margin of safety = $
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