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E18-9 Compute break-even point The Palmer Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that
| E18-9 Compute break-even point | |||||||||
| The Palmer Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at | |||||||||
| $60 a night. Operating costs are as follows. | |||||||||
| Salaries | $5,900 per month | ||||||||
| Utilities | $1,100 per month | ||||||||
| Depreciation | $1,000 per month | ||||||||
| Maintenance | $100 per month | ||||||||
| Maid Service | $14 per room | ||||||||
| Other costs | $28 per room | ||||||||
| Instructions | |||||||||
| Determine the inn's break-even point in (a) number of rented rooms per month and (b) dollars. | |||||||||
| NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . | |||||||||
| (a) | Determine the inn's break-even point in number of rented rooms per month | ||||||||
| Contribution margin per room | |||||||||
| Rent per room | Value | ||||||||
| Variable cost per room | ? | ||||||||
| Contribution margin per room | ? | ||||||||
| Contribution margin ratio | |||||||||
| Contribution margin per room | Value | ||||||||
| Rent per room | Value | ||||||||
| Contribution margin ratio | ? | ||||||||
| Fixed costs | ? | ||||||||
| Break-even point in rooms | |||||||||
| Fixed costs | Value | ||||||||
| Contribution margin per room | Value | ||||||||
| Break-even point in rooms | ? | ||||||||
| (b) | Determine the inn's break-even point in dollars. | ||||||||
| Break-even point in dollars | |||||||||
| Break-even point in rooms | Value | ||||||||
| Rent per room | Value | ||||||||
| Break-even point in dollars | ? | ||||||||
| OR | |||||||||
| Fixed costs | Value | ||||||||
| Contribution margin ratio | Value | ||||||||
| Break-even point in dollars | ? | ||||||||
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Financial Accounting Theory
Authors: William R. Scott
3rd Edition
0130655775, 9780130655776
