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Sharon Botosan operates a bed and breakfast hotel in a resort area near Lake Michigan. Depreciation on the hotel is $80,760 per year. Sharon employs
Sharon Botosan operates a bed and breakfast hotel in a resort area near Lake Michigan. Depreciation on the hotel is $80,760 per year. Sharon employs a maintenance person at an annual salary of $61,000 and a cleaning person at an annual salary of $44,000. Real estate taxes are $30,000 per year. The rooms rent at an average price of $80.00 per person per night including breakfast. Other costs are laundry and cleaning service at a cost of $30.20 per person per night and the cost of food, which is $25.00 per person per night. (a) Your answer is correct. Determine the quantity of rentals and the sales revenue Sharon needs to break even using the contribution margin technique. Break-even quantity
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