The condensed income state of the SHA inn is as follows:

SHA Motel

For the year ended December 31, 20X1

*Rent: 10% of room sales

** Includes depreciation and amortization of $500,000

1. Compute the CMR for the room department

2. Compute the SHAs weighted average of CMR

3. Compute the SHAs breakeven point

4. If the SHA wants to make $1,500,000 of net income (tax rate:27.27%), what must its rooms sales equal?

SHA Motel For the year ended December 31, 20X1 Revenue VC FC $5,000,000 3,000,000 500,000 1,000,000 1,000,000 200,000 500,000 1,000,000 100,000 Department Income 3,500,000 1,000,000 200,000 4,700,000 Room Food Other Total department income Other Variable expense* Other fixed 500,000 2,000,000 costs ** Pretax income Income taxes Net income 2,200,000 600,000 1,600,000