02:30 PM Q{ * .il 89% Mangement AccountingTextbook course workque 65 Chapter 2 Introduction to Cost Behavior and cost-Volume Relationships Required Required 2.24 Hospital Costs and Pricing St. Vincent lospltal has rull variable costs of 30% of total revenue and fixed costs of 342 million per year 1 Compute the break-even point expressed in total revenue 2. Apatient-day is often used to measure the volume of a hospital. Suppose there are going to be 50,000 patient-clay next year. Compute the average daily revenue per patient necessary to break even 2-25 Motel Rentals The Holiday Motel has annual fixed costs applicable to its rooms of $3.2 million for its 400-room motel, average daily room rents of $50, and average variable costs of $10 for each room rented. It operates 365 days per year 1. How much net income on rooms will be generated (1if the motel is completely full throughout the entire year and (2) if the motel is half full? 2. Compute the break-even point in number of rooms rented. What percentage occu paney for the year is needed to break even? 2-26 Basic Relationships, Hotel The Pippin Hotel in Chicago has 400 rooms with a fixed cost of $350,000 per month during the busy season. Room rates average 562 per day with variable costs of $12 per rented room per day. Assume a 30-day month. 1. How many rooms must be occupied per day to break even? 2. How many rooms must be occupied per month to make a profit of $100,000? 3. Assume that the Pippin Hotel has these average contribution margins per month from use of space in its hotel Required Leased shops in hotel Meals served, conventions Dining room and coffee shop Bar and cocktail lounge 560,000 30,000 30,000 20,000 Required Fixed costs for the total hotel are $350.000 per month. Variable costs are $12 per day per rented room. The hotel has 400 rooms and averages Y average rate per day must the hotel charge to make a profit of Pancy per day What $100,000 per month? 2-27 Sales-Mix Analysis Study Appendix 2A. Tanaka Farms produces strawberries and raspberries. Annual fixed costs are $14,400. The cost driver for variable costs is pints of fruit produced. The vari- able cost is $.40 per pint of strawberries and 5.60 per pint of raspberries. Strawberries sell for $.75 per pint, raspberries for $1.10 per pint. Two pints of strawberries are produced for every pint of raspberries 1. Compute the number of pints of strawberries and the number of pints of raspber- ries produced and sold at the break-even point 2. Suppose only strawberries are produced and sold. Compute the break-even point in pints 3. Suppose only raspberries are produced and sold. Compute the break-even point in pints 2-28 Income Taxes Review the illustration in Appendix 28. Suppare the income tax rate were 20%. instead of 40% How many units would have to be sold to achieve a target net income of (1) $288 and (2) $480? Show your computations
