1. A hotel has a rack rate of 250 and a yield of 85%. There are 200 rooms in inventory and last year they ran 70% occupancy. Variable costs are 35 dollars per room night sold. Fixed costs for one year are 5 million dollars.

Prepare an income statement for one year in the contribution margin format.

Determine the contribution margin per unit (room night)

Calculate breakeven sales revenue

If the company expected to make 2 million in operating income, calculate the breakeven number of room nights for on year.

2. A restaurant has an average guest check of 10 dollars, cos is 3 per meal, variable labor is 2 dollars per meal, and variable operating expenses is 1 per meal. Fixed costs include depreciation of 10,000 per year and salaries of 3000 per month. Complete the following:

1. What is the selling price, variable cost per unit, contribution margin per unit, contribution margin %, variable cost %, and total annual fixed costs.
2. What is the breakeven # of units for a year and the break even sales dollars for a year
3. If the restaurant wants to make 40,000 in operating income in the year, what is the # units and sales they need to make in total.
4. If the restaurant wants to add another salaried manager for 1000 per month, what is the additional monthly revenue they need to have to cover the salary?
5. If the restaurant wants to add 7000 per year in fixed costs, what is the additional annual sales they need to have to cover the new cost?
6. Prepare an annual income statement at selling 10,000 meals per month use the original information above.

1. Assume we change the price of meals, so a new average guest check is 12 dollars. The variable costs per meal stay the same and the fixed costs stay the same. All we do is change the price. Now, complete a, b, c, d, e using the new average guest check.