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A L M 2 C C D E F G H I J K Klava Hotel Inn is trying to determine its break-even point. The
A L M 2 C C D E F G H I J K Klava Hotel Inn is trying to determine its break-even point. The Inn has 90 rooms that it rents out $100 per a night. Operating costs are as follows: Salaries $10,000 per month Utilities 4,000 per month Depreciation 3,000 per month Maintenance 1,000 per month Maid Service 30 per room Other costs 50 per room Instructions 1. Prepare a CVP Income Statement for April (30 days) based on full capacity usage (assuming that 100% rooms are occupied), 2. Compute the break-even point in (1) units - number of nights sold; and (2) dollars 3. Compute contribution margin ratio (round to 2 decimals.). 4. Compute margin of safety ratio (round to 2 decimals) for this level of activity (100 % capacity usage) 5. Determine sales dollars required to earn Net Income of $54,000 6. Compute degree of operating leverage and comment on how it will change [increase or decrease), if a company decides to outsource made service and pay a fixed fee per month = Your name and D 2 . Question 3. Solvina
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