Number of rooms $ ADR OCC RevPAR 240 2018 192 80% 154 $ New Revenues Sales Mix REVENUE Rooms Food & Beverage Other Operated Departments Miscellaneous Income TOTAL REVENUE $ 13,455,360 $ 2,899,577 $ 303,933 $ 119,113 $ 16,777,983 Fixed Cost Variable Cost DEPARTMENTAL EXPENSES Rooms Food & Beverage Other Operated Departments TOTAL DEPARTMENTAL EXPENSES $ 2,691,072 $ 1,449,788 $ 121,573 $ 4,262,434 TOTAL DEPARTMENTAL PROFITS $ 12,515,550 UNDISTRIBUTED OPERATING EXPENSES Administrative & General Marketing Utility Costs Property Operation & Maintenance TOTAL UNDISTRIBUTED OPERATING EXPENSES $ 671,119 $ 503,339 $ 335,560 $ 251,670 $ 1,761,688 $10,753,861 GROSS OPERATING PROFIT Franchise Fees (Royalty) (5% of Rooms Revenue) Management Fees (6% of GOP) $ $ 672,768 645,232 INCOME BEFORE FIXED CHARGES $ 9,435,862 SELECTED FIXED CHARGES Property Taxes Insurance Reserve For Capital Replacement $ $ $ 335,560 63,000 215,077 EBITDA Depreciation Interest Expense Income Before Income Tax Income Tax @ 30% Net Income $ 8,822,225 $ 280,000 $ 68,000 $ 8,474,225 $ 2,542,267 $ 5,931,957 Total CMR New CMR Based on the income statement and the information below: The income tax rate is 30%. 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: $300,000 is fixed, the remainder is variable with total revenue. Marketing S240,000 is fixed, the remainder is variable with total revenue. Utilities cost: $120,000 is fixed, the remainder is variable with total revenue. Property Operations & Maintenance: $135,000 is fixed, the remainder is variable with total revenue. Assume both franchise fees and management fees to be fixed. Answer the following questions based on the given information and the income statement. 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 $240 ADR? 4. What revenue is required to achieve desired operating income (income before income tax) of S6,000,000? 5. If the operating income (income before income tax) of $6,000,000 achieved, how much would the food and beverage revenue be? 6. If rooms and food & beverage revenues increase by 18% and 25%, respectively, through price increases, what would the new breakeven be? 7. What would the required revenue be if a net income of $8,000,000 is desired? Number of rooms $ ADR OCC RevPAR 240 2018 192 80% 154 $ New Revenues Sales Mix REVENUE Rooms Food & Beverage Other Operated Departments Miscellaneous Income TOTAL REVENUE $ 13,455,360 $ 2,899,577 $ 303,933 $ 119,113 $ 16,777,983 Fixed Cost Variable Cost DEPARTMENTAL EXPENSES Rooms Food & Beverage Other Operated Departments TOTAL DEPARTMENTAL EXPENSES $ 2,691,072 $ 1,449,788 $ 121,573 $ 4,262,434 TOTAL DEPARTMENTAL PROFITS $ 12,515,550 UNDISTRIBUTED OPERATING EXPENSES Administrative & General Marketing Utility Costs Property Operation & Maintenance TOTAL UNDISTRIBUTED OPERATING EXPENSES $ 671,119 $ 503,339 $ 335,560 $ 251,670 $ 1,761,688 $10,753,861 GROSS OPERATING PROFIT Franchise Fees (Royalty) (5% of Rooms Revenue) Management Fees (6% of GOP) $ $ 672,768 645,232 INCOME BEFORE FIXED CHARGES $ 9,435,862 SELECTED FIXED CHARGES Property Taxes Insurance Reserve For Capital Replacement $ $ $ 335,560 63,000 215,077 EBITDA Depreciation Interest Expense Income Before Income Tax Income Tax @ 30% Net Income $ 8,822,225 $ 280,000 $ 68,000 $ 8,474,225 $ 2,542,267 $ 5,931,957 Total CMR New CMR Based on the income statement and the information below: The income tax rate is 30%. 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: $300,000 is fixed, the remainder is variable with total revenue. Marketing S240,000 is fixed, the remainder is variable with total revenue. Utilities cost: $120,000 is fixed, the remainder is variable with total revenue. Property Operations & Maintenance: $135,000 is fixed, the remainder is variable with total revenue. Assume both franchise fees and management fees to be fixed. Answer the following questions based on the given information and the income statement. 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 $240 ADR? 4. What revenue is required to achieve desired operating income (income before income tax) of S6,000,000? 5. If the operating income (income before income tax) of $6,000,000 achieved, how much would the food and beverage revenue be? 6. If rooms and food & beverage revenues increase by 18% and 25%, respectively, through price increases, what would the new breakeven be? 7. What would the required revenue be if a net income of $8,000,000 is desired