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Elizabeth Botosan operates a bed and breakfast hotel In a resort area near Lake Michigan. Depreciation on the hotel is $63,140 per year. Ellzabeth employs a maintenance person at an annual salary of $46,000 and a cleaning person at an annual salary of $29,000. Real estate taxes are $15,000 per year. The rooms rent at an average price of $65.00 per person per night Including breakfast. Other costs are laundry and cleaning service at a cost of $14.70 per person per night and the cost of food, which is $10.00 per person per night. Determine the quantity of rentals and the sales revenue Elizabeth needs to break even using the contribution margin technique. Break-even quantity of rentals Break-even sales If the current level of rentals Is 4,800, by what percentage can rentals decrease before Elizabeth has to worry about having a net loss? (Round percentages to 0 decimal places, e.g. 52%] Margin of safety Break-even number of rentals $ Elizabeth Is considering upgrading the breakfast service to attract more business and Increase prices. This will cost an additional $8 for food costs per person per night. She feels she can Increase the room rate to $83.00 per person per night. Determine the quantity of rentals and the sales revenue Elizabeth needs to break even if the changes are made. (Round answers to O decimal places, eg. 5.275) Break-even sales S 96

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