1. Fixed costs are$90,000,operating incomerequired is$15,000,and variable costs are45%.Tax rate is40%.Sales revenue will have to be(to nearest$1.00):

$190,909

$203,333

$230,333

$233,333

2. A60-room motel usually rents out its rooms in the following p..;@$24.00

25%doubles @ $30.00

25%triples @$36.00

Variable costs have been calculated to average $8.50per room occupied.Annual fixed costs are $225,800. Base your calculationson the assumption that 20 rooms are sold.

a)Calculate the motel'sbreakevenoccupancy percent_________.

b) Calculate the occupancy percentage that will give an operating income (before tax) of $20,000 per year____________.

c) Calculate the occupancy percentage that will give an operating income (before tax) of $20,000 per year if the average room rate decreased by 15 percent____________.

a) BEOcc%:51%

b)Occ% with $20,000 OI:65%

c)Occ% with $20,000 OI and 15% decrease AVG RM Rate:77%

a)BEOcc%:52%

b)Occ% with $20,000 OI:56%

c)Occ% with $20,000 OI and 15% decrease AVG RM Rate:70%

a)BEOcc%:52%

b)Occ% with $20,000 OI:56%

c)Occ% with $20,000 OI and 15% decrease AVG RM Rate:71%

3. A 450-room motel recorded the following: total cleaning supplies costs for cleaning rooms and rooms sold for the high and low months of year 2005. Determine the variable cost per room and the fixed cost for one month for cleaning costs.

Units SoldCleaning Costs

High month12,000$10,600

Low month5,000$7,000

VC Per Room =$0.51

Fixed Costs Per Month = $4,429

VC Per Room = $0.45

Fixed Costs Per Month = $4,600

VC Per Room = $0.45

Fixed Costs Per Month = $4,750

VC Per Room = $1.70

Fixed Costs Per Month = $4,300

4. A restaurant has 125 seats with an average check of $8.00 and a daily seat turnover of 2.5. It is open 6 days a week and the average check is forecast to increase by 10% in the next year. Next year's budgeted sales revenue will be:

$686,000

$850,000

$780,000

$ 715,000

5.A motel's average room rates for3successive years were:Year1,$32.00;Year2,$65.00;and Year3,$47.00.Calculate the trend index numbers for years2and3;Year1is the base year.The trend index numbers for each of the3years are:(round to the nearest whole number)

110.0, 113.0, 135.0

100.0. 113.0, 147.0

None of the above answers are correct.

121.0, 124.0, 127.0

6. You have the following projections about the costs in a fast food restaurant for the next year: Net income [AT] required is 18% on the equity investment of $240,00. The income tax rate is 28%. Depreciation on restaurant furnishings and equipment is 20% of the present book value of $112,000. Interest on the bank loan is 12% of the present balance owed of $50,000. Other costs are:

Insurance expense $4,500 Licenses expense $3,200 Utilities expense $12,600 Maintenance expense $1,200 Management salary expense $48,900 Cost of Sales (food and beverage expenses) 35% of total sales revenue Variable wage expenses 33% of total sales revenue Other variable expenses 8% of total sales revenue a) Calculate the sales revenue required to cover all the restaurant expenses next year: $___________ b) Calculate the restaurant's overall average check, given that the restaurant has 132 seats and that is is open six days a week for 52 weeks of the year, and that 2.2 seat turnovers per day are achieved. 

Sales Revenue:$1,054,524

Overall Average Check:$11.64

Sales Revenue:$661,667

Overall Average Check:$7.30

Sales Revenue:$208,947

Overall Average Check:$2.31