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 $75 a night. Operating costs are as follows.
Salaries | $6,000 | per month | |
Utilities | $1,200 | per month | |
Depreciation | $900 | per month | |
Maintenance | $4,380 | per month | |
Maid service | $15 | per room | |
Other costs | $30 | per room |
Determine the inn’s break-even point in number of rented rooms per month.
Break-even point |
|
rooms |
Determine the inn’s break-even point in dollars.
Break-even point | $
|
Solution
Break even point = 416 rooms
Break even point = $ 31,200
Working
Total Fixed cost | |
Salaries | $ 6,000.00 |
Utilities | $ 1,200.00 |
Depreciation | $ 900.00 |
Maintenance | $ 4,380.00 |
Total Fixed cost | $ 12,480.00 |
.
A | Sale Price per unit | $ 75.00 |
B | Variable Cost per Unit | $ 45.00 |
C=A x B | Unit Contribution | $ 30.00 |
D | Total Fixed cost | $ 12,480.00 |
E=D/C | Breakeven point in units | 416 |
F= E x A | Breakeven in sales dollars | $ 31,200 |
The Palmer Acres Inn is trying to determine its break-even point during its off-peak season. The...
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 $70 a night. Operating costs are as follows:
Salaries
$5,000
per month
Utilities
$1,200
per month
Depreciation
$900
per month
Maintenance
$1,657
per month
Maid service
$17
per room
Other costs
$32
per room
Determine the inn’s break-even point in number of rented rooms
per month.
Break-even point
rooms
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Determine...
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