Based on the income statement and the information below: The income tax rate is 25%. Number of rooms is 240 , and hotel operates at 80% occupancy. Room, Food \& Beverage, and Other Operated Department expenses are directly variable with total sales revenue. Administrative \& General: $2,400,000 is fixed, the remainder is variable with total revenue. Marketing $1,240,000 is fixed, the remainder is variable with total revenue. Utilities cost: $180,000 is fixed, the remainder is variable with total revenue. Property Operations \& Maintenance: $188,000 is fixed, the remainder is variable with total revenue. Assume both franchise fees and management fees to be fixed. Answer the following questions. 1. What is the revenue at breakeven point? 2. At breakeven point, what would the room revenues be? 3. At breakeven point, what is the occupancy at $320 ADR? 4. What revenue is required to achicve desired operating income (income before income tax) of $12,000,0007 5. If the operating income (income before income tax) of $12,000,000 schicved, how much would the food and bevenge revenue be? 6. If rooms and food & bevenage revenues increase by 10% and 15%, respectively, through price increases, what would the new breakeven be? 7. If fixed cost increases by $2,400,000, how much addtional revenues is needed to cover the additional fixed expenser? 8. What would the required revenue be if a net income of 59,000,000 is desired? 9. What would the occupancy rate be if a net income of $9,000,000 is achicved at 5320ADR ? 10. If the depreciation expense decreases by 100,000 , what would the becakeven point be? 11. If the hoiel reduces all departmental expenses by 10%, what would the new breakeven be? 12. What would the required revenue be if a net income of 510,000,000 is desirod and at the same time the fixed expenses incease by 51,200,000? Based on the income statement and the information below: The income tax rate is 25%. Number of rooms is 240 , and hotel operates at 80% occupancy. Room, Food \& Beverage, and Other Operated Department expenses are directly variable with total sales revenue. Administrative \& General: $2,400,000 is fixed, the remainder is variable with total revenue. Marketing $1,240,000 is fixed, the remainder is variable with total revenue. Utilities cost: $180,000 is fixed, the remainder is variable with total revenue. Property Operations \& Maintenance: $188,000 is fixed, the remainder is variable with total revenue. Assume both franchise fees and management fees to be fixed. Answer the following questions. 1. What is the revenue at breakeven point? 2. At breakeven point, what would the room revenues be? 3. At breakeven point, what is the occupancy at $320 ADR? 4. What revenue is required to achicve desired operating income (income before income tax) of $12,000,0007 5. If the operating income (income before income tax) of $12,000,000 schicved, how much would the food and bevenge revenue be? 6. If rooms and food & bevenage revenues increase by 10% and 15%, respectively, through price increases, what would the new breakeven be? 7. If fixed cost increases by $2,400,000, how much addtional revenues is needed to cover the additional fixed expenser? 8. What would the required revenue be if a net income of 59,000,000 is desired? 9. What would the occupancy rate be if a net income of $9,000,000 is achicved at 5320ADR ? 10. If the depreciation expense decreases by 100,000 , what would the becakeven point be? 11. If the hoiel reduces all departmental expenses by 10%, what would the new breakeven be? 12. What would the required revenue be if a net income of 510,000,000 is desirod and at the same time the fixed expenses incease by 51,200,000
