Question

1- The Crazy Horse Hotel has a capacity to stable 25 horses. The fee for stabling a horse is 220 per month. Maintenance, depreciation, and other fixed operating costs total $1200 per month. Variable operating costs per horse are $10 per month for hay and bedding and $10 per month for grain. a. Determine the monthly operating break-even point (in horses stabled). b. Compute the monthly operating profit if an average of 50 horses are stabled. هذا اللي ل كن Pais i ns F6 F8 F9 F1

Answer 1

particulars		for 25 horses	for 50 horses
fee		220	220
variable expenses:
hay		-10	-10
grain		-10	-10
contribution per horse		200	200
total contribution		5,000	10,000
fixed expenses		-1,200	-2,400
operating profit		3,800	7,600
a. Break even point (no of horses)	=	fixed cost/ contribution per unit
	=	1200/ 200
	=	6
b. Monthly operating profit	=	7,600