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Calculate the required item below to generate a desired operating income of $600,000. (Remember, you are not just breaking even. You are covering fixed
Calculate the required item below to generate a desired operating income of $600,000. (Remember, you are not just breaking even. You are covering fixed costs of $420,000 plus $600,000 of operating income). Achieving a Target Operating Profit nfomation Provided Desired operating profit 1) Rooms Sold: (PC Desired Operating Profit/ Contribution Margin perrooom sold) 2) Sales for Target Operating Profit (Rooms Sold*ADR) 31 variable costs (Sales variable cost percentage) 4) Contribution Margin Fed Costs Operating income 600,000 420,000 600,000 Pease calculate the above: Contribution Margin (Sales - Variable Cost) Extra data below: Rooms Division Cost Volume Prot Analysis Information Provided Average Daily Rate Variable Cost per Occupied Room Faed Costs (per month) 330.00 170.00 420,000.00 a) Contribution Margin Per Room Sold b) Contribution Margin Ratio This implies that the variable cast percentage is) 100.00 0.465 51.52% Operating Income at a certain levd of roomnights Information Provided Rol Rooms Sold Sales Variable Cost Contribution Margin Fixed Costs Operating in come 3,000 990,000.00 510.000.00 480.000.00 420.000.00 60.000.00
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