The Bonita Inn is trying to determine its break-even point.
accounting teacher (Not rated)
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E6-1 The Bonita Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at a night. Operating costs are as follows.
Salaries | $8,800 | per month | Maintenance | $800 | per month | |
Utilities | 2,400 | per month | Maid service | 8 | per room | |
Depreciation | 1,500 | per month | Other costs | 37 | per room |
Instructions
(a)(1) Determine the inn's break-even point in number of rented rooms per month.
(a)(2) Determine the inn's break-even point in dollars.
(b)(1) If the inn plans on renting an average of rooms per day (assuming a -day month), what is the monthly margin of safety in dollars?
(b)(2) If the inn plans on renting an average of rooms per day (assuming a 30-day month), what is the margin of safety ratio?
TUTORIAL PREVIEW
(a)(1) Determine the inn's break-even point in number of rented rooms per month.
Contribution margin per room = | $60 | - ( | $8 | + | $37 | ) | |
Contribution margin per room = | $15 | ||||||
10 years ago
The Bonita Inn is trying to determine its break-even point.
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e6-1_the_bonita.xls
