Question #$1$

Hugh Payne operates a fishing resort in Nome Alaska.

Depreciation on the resort buildings is $$6,000$ per year.

Real estate taxes are $$8,000$ per year.

General property insurance is $$9,000$ per year.

Resort rooms rent at an average price of $$535$ per person per night and include all meals and a day on the water for great Alaska fishing.

Four fishing guides are employed during the fishing season at a total salary of $$100,000.$

Variable expenses per person per day are as follows:

Meals: $$120$

Fishing Supplies: $$40$

Boat: $$45$

Liability Insurance: $$30$

Required

a$.$ Determine the number of guests and the sales revenue Hugh needs to breakeven using the contribution margin technique.

b$.$ If the current number of guests is $635,$ calculate the "margin of safety".

c$.$ Based on the current level of business of $635$ guests noted in b$.$ above, how many additional quests would Hugh need to have to double profits?