Exercice 2: Cost Volume Analysis Tenness B\&B Inn is a small bed-and-breakfast inn located in the Great Smoky Mountains of Tennessee. The charge is $50 per person for one night's lodging and a full breakfast in the morning. The retired couple who own and manage the inn estimate that the variable expense per person 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 each night. Questions : 1. Compute the contribution margin per unit of service. (A unit of service is one night's lodging for one guest.) 2. Compute the Contribution-margin ratio. 3. Compute the Annual break-even point in units of service and in dollars of service revenue. 4. Compute the number of units of service required to earn a target profit of $60,000 for the year. (Ignore income taxes.) Aomet of 75.000 machelifothours. The following tranasctione were recorded for tho your Rew materials were purchabod on accourt, $410,000. Ratw materinfa Wero recuisitionoc for use in proctuctlon. 33800C2 materials and $20,000 indiroct materials). The following eosts were accrucd for enployee services: direct labor, 575,000; indirect labor, $110,000; administrative salaries, $200,000. Sales travel costs were $17,000. Utility costs in the factory were $43,000. Advertising costs were $180,000. Depreciation was recorded for the year, $350,000(80% operations, and 20% relates to selling and administrative Insurance expired during the year, $10,000(70% relates he remaining 30% relates to selling and administrative lanufacturing overhead was applied to production. Du mand for its products, the company worked 80,000 ring the year. ods costing $900,000 to manufacture according to pleted during the year. ds were sold on account to customers during the joods cost $870,000 to manufacture according