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sments/4eSaabcf-926a-4394-995-7e0180673 Current Attempt in Progress The Sunland Acres Inn is trying to determine its break-ev

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Answer #1

Total Fixed Cost = (salaries + Utilities + Depreciation + Maintenance)

Total Fixed Cost = ($5,400 + $1,200 + $1,100 + $2,140)

Total Fixed Cost = $9,840

Contribution Margin = Selling price per unit - Variable cost per unit

Contribution Margin = $80 - ($19 + $37)

Contribution Margin per room = $24

Break even point in units = Fixed cost / Contribution margin per unit

Break even point in units = $9,840 / $24 = 410 rooms

Break even point in units = 410 rooms

Break even point in dollars = Fixed cost / Contribution margin ratio

Break even point in dollars = $9,840 / (24/80)

Break even point in dollars = $32,800

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