1 E6.1 Compute break-even point and margin of safety 2 3. The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that 4 are rented at $60 a night. Operating costs are as follows. 5 6 Salaries $ 10,600 per month 7 Utilities 2,400 per month 8 Depreciation 1,500 per month 9 Maintenance 800 per month 10 Maid service 8 per room 11 Other costs 34 per room 12 13 Instructions 14 a. Determine the inn's break-even point in (1) number of rented rooms per month 15 and (2) sales dollars. 16 b. If the inn plans on renting an average of 50 rooms per day (assuming a 30-day 17 month), what is (1) the monthly margin of safety in dollars and (2) the margin of 18 safety ratio? 19 20 NOTE: Enter a formula, a cell reference, or a value (if you are unable to 21 reference a cell), into the yellow shaded input cells. 22 23 G a. (1) Breakeven point in rooms Rental per room Variable cost per room Contribution margin per room Fixed costs Contribution margin per room Break-even point in rooms (2) Break-even point in dollars Contribution margin per room Rental per room Contribution margin ratio Break-even point in rooms Rental per room Break-even point in dollars OR Fixed cost Contribution margin Patio Break-even point in dollars b. (1) Margin of safety in dollars Expected rental revenues Break-even sales Margin of safety in dollars (2) Margin of safety ratio Margin of safety in dollars Expected rental revenues Margin of safety ratio