Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A wood cabin has total annual sales revenue of $1,020,000, variable costs of $350,000, and fixed costs of $570,000. The fixed costs include $80,000 a
A wood cabin has total annual sales revenue of $1,020,000, variable costs of $350,000, and fixed costs of $570,000. The fixed costs include $80,000 a year for a land rental lease. The landowner offered an alternative variable rent based on 20% of the revenue. Under which plan will we need less revenue to break-even? (Hint: Acceptance of the variable lease will reduce fixed costs by $80,000 and increase variable costs by 20%.) .2 Now assuming the cabin owner needs to include taxes in her consideration. She wants a net income of $50,000. The tax rate is 20%. The fixed costs are $570,000, and the hotel's contribution margin \% is 40%. What is the required revenue
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started