Question
Last month, the revenues of rooms and catering department of the Lawren & Henny Luxury Suites were $310,000 and $190,000 respectively. The VCs for rooms
Last month, the revenues of rooms and catering department of the Lawren & Henny Luxury Suites were $310,000 and $190,000 respectively. The VCs for rooms and catering departments were $155,000 and $75,000 respectively. Suddenly, this month, rooms revenue has increased by 10.00%, catering revenue has increased by 8.00% and there is a 12.00% decrease in VC for both departments. Imagine that the total fixed cost is $200,000. How much reduction in total revenue at the breakeven has Lawren & Henny Luxury Suites experienced before and after the changes in both revenues and VCs?
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