4. Cost-Volume-Profit Analysis (CV P) Queen Street Inn is a small bed and breakfast inn. The charge is $50 per person for one night's lodging and a full breakfast in the morning. The owners of the inn estimate that the variable expense is $20. This includes such expenses as food, maid service, and utilities. The inn?s fixed expenses total $42,000 per year. The inn can accommodate 10 guests per night. Use 360 days per year INSTRUCTIONS: Compute the following: a. Contribution margin per unit of service (A unit of service is one night's lodging for oneguest.) b. Contribution margin ratio c. Variable expense ratio d. Annual breakeven point in units of service using the equation method the formula: Sales = (Variable Cost)(Sales) + Fixed Cost + Operating Income e. Annual breakeven point in dollars of service using the equation method the formula: Sales = (Variable Cost Ratio)(Sales) + Fixed Cost + Operating Income f. The number of units of service required to earn a target net profit of $60,000 for the year using the contribution margin method (show formula to be used) g. The government provides an incentive of S9,000 to owners of small hotels, for which Queen Street Inn qualifies. Compute the breakeven point if Queen Street Inn accepts the incentive. Use the contribution margin method. h. Base on the fact that the inn's occupancy for 2013 came up to 3\4 of maximum accommodation capability, prepare a contribution margin income statement. 4. Cost-Volume-Profit Analysis (CV P) Queen Street Inn is a small bed and breakfast inn. The charge is $50 per person for one night's lodging and a full breakfast in the morning. The owners of the inn estimate that the variable expense is $20. This includes such expenses as food, maid service, and utilities. The inn?s fixed expenses total $42,000 per year. The inn can accommodate 10 guests per night. Use 360 days per year INSTRUCTIONS: Compute the following: a. Contribution margin per unit of service (A unit of service is one night's lodging for oneguest.) b. Contribution margin ratio c. Variable expense ratio d. Annual breakeven point in units of service using the equation method the formula: Sales = (Variable Cost)(Sales) + Fixed Cost + Operating Income e. Annual breakeven point in dollars of service using the equation method the formula: Sales = (Variable Cost Ratio)(Sales) + Fixed Cost + Operating Income f. The number of units of service required to earn a target net profit of $60,000 for the year using the contribution margin method (show formula to be used) g. The government provides an incentive of S9,000 to owners of small hotels, for which Queen Street Inn qualifies. Compute the breakeven point if Queen Street Inn accepts the incentive. Use the contribution margin method. h. Base on the fact that the inn's occupancy for 2013 came up to 3\4 of maximum accommodation capability, prepare a contribution margin income statement
