A 60-room hotel near Land’s End in Cornwall incurs annual fixed costs of

£360,000. The hotel is open for 365 nights in the year and charges an average room rate of £68. e variable costs associated with room occupancy are £8 per room night.

Required:

a) At what room occupancy level would the hotel breakeven?

b) At what level of sales would the hotel make a before tax profit of £60,000?

c) If the hotel pays 40 per cent tax, how many rooms must be sold in order to make an aer tax profit of £72,000?