Total variable costs=Maid service+Other costs
=(8+34)=$42 per room
Total fixed costs=Salaries+Utilities+Depreciation+Maintenance
=(11150+2900+1300+850)=$16200
Contribution margin=Sales price-Variable cost
=(60-42=$18 per room
Hence breakeven=Fixed cost/Contribution margin
=(16200/18)
=900 rooms
=(900*60)=$54000
2.Margin of safety=Total sales-Breakeven sales
=(50*30)-900=600 rooms
=(600*60)=$36000
Margin of safety ratio=Margin of safetyTotal sales
=(600/(50*30))=40%
The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that...
The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $56 a night. Operating costs are as follows. $10,000 per month Salaries 2,100 per menth Utilities Depreciation 1,500 per month 800 per month Maintenance 7 per room Maid service 31 per room Other costs Determine the inn's break-even point in (1) number of rented rooms per month and (2) dollars 1. Break-even point in rooms 2. Break-even point If the inn...
The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $56 a night. Operating costs are as follows. Salaries Utilities Depreciation Maintenance Maid service Other costs $10,000 per month 2,600 per month 1,400 per month 700 per month 8 per room 34 per room Determine the inn's break-even point in (1) number of rented rooms per month and (2) dollars. 1 Break-even point in rooms 2. Break-even point $ per month...
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