Exercise 6-1 (Part Level Submission)

The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $60 a night. Operating costs are as follows.

Salaries		$6,050	per month
Utilities		3,000	per month
Depreciation		1,500	per month
Maintenance		700	per month
Maid service		9	per room
Other costs		36	per room

(a)

	Your answer is correct.

Determine the inns break-even point in (1) number of rented rooms per month and (2) dollars.

1.		Break-even point in rooms
2.		Break-even point		$	per month

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Attempts: 2 of 15 used

(b)

	Your answer is partially correct. Try again.

If the inn plans on renting an average of 50 rooms per day (assuming a 30-day month), what is (1) the monthly margin of safety in dollars and (2) the margin of safety ratio? (Round ratio to 0 decimal places, e.g. 10%.)

1.		Margin of safety		$
2.		Margin of safety ratio			%

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Attempts: 6 of 15 used

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