Highlands Nook is a small but luxurious transient Inn located in the highland area in Region X. The charge is $60 per person for one nights lodging and a full breakfast in the morning. Two retired hotel receptionists who won and manage the inn estimate that the variable expense per person is $25. This includes such as expenses as food, maid service, and utilities. The inns fixed expenses total $35,000 per year. The inn can accommodate 10 persons each night.

Required: compute the following.

Contribution margin per unit of service. (A unit of service is one nights lodging for one guest) Contribution margin ratio. Annual break-even point in units of service and in dollars of service revenue. The number of units of service required to earn a target net profit of $50,000 for the year. (disregard income taxes)